In May 2007, the Alberta Insurance Council won a lengthy battle for mortgage life insurance Alberta. In order to protect the consumer, the council proposed that anyone selling mortgage life insurance in Alberta must follow a training protocol for disclosures and requirements of their staff.
Canadian banks caused uproar and fought it all the way to the Supreme Court, only to lose the battle. Alberta was the first province to protect the consumer's rights concerning mortgage life insurance.
Previous to this, banking and lenders wrote the policies without reviewing them until there was a claim made. All premiums to the claims went straight to the lender if it wasn't denied first.
All over Canada, collective insurance agents denied claims based on false representation. When I say false, this was more of an excuse than anything. For example, a woman who didn't check they had a mammogram within five years would be denied disability premiums from a car accident, even though the two are totally unrelated to each other.
As a result, personal mortgage life insurance started to gain momentum. With personal mortgage insurance, the borrower has all disclosures and reviews done upfront. There are no surprises in the end. Plus, personal mortgage insurance is highly competitive.
On a $150,000 house with 12.9% interest, expect to save as much as $5,000 on your mortgage insurance. Apply this to your principal, and you could knock 32 months off a 30-year loan.
Mortgage brokers are required to offer mortgage life insurance in Alberta according to Canadian law. Most of the time, consumers don't even know they have the option to carry the policy in their name with a private mortgage. Getting online to research could save you more time and frustration than you could ever imagine.
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Orignal From: The Truth about Mortgage Life Insurance in Alberta
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