I will echo what Slava and others have said regarding mortgage insurance purchased from a lender like a big 5 bank. Get proper approval and insurance such as life and disability insurance from a licences insurance advisor. I will try and summarize quickly the reasons behind it.
The Bank Act, the legislation that regulates a lot of the banking sector has some controversial aspects to it when it comes to insurance activities and products for banks. Simply put, banks are prohibited from selling bank owned insurance products to clients inside bank branches and other direct selling platforms.
This probably was or is still done as per the insurance lobby as they feel banks have/had a competitive advantage with their large branch footprint. If you think of the Big 5 banks all having approx 1000 branches across Canada in recent years vs some of the insurance offices which are much smaller.
The issue is that consumers still have insurance needs and the banks love the non interest revenue that comes with selling clients insurance needs such as travel, medical, life, disability, personal lending and mortgage insurance etc.
Almost all the insurance products sold to bank clients are underwritten by insurance companies such as Sun Life, Manulife, London Life etc and those companies pay a commission or a % of the premium bank to the bank.
Personal bankers aren't licenced insurance employees but are obligated to sell these products. If you take mortgage insurance, its sold as being the cats a** but in reality it only pays off the existing debt on the mortgage or makes the payments if you are ill and have coverage. Proper planning should entail getting coverage to pay for additional expenses.
The issue is how these policies are underwritten, a quick 2-3 questionnaire where you answer about a few health questions and then start paying premiums and think you have coverage. If you have to file a claim for whatever reason, then the insurance company will do a post claim underwriting process and dig a little deeper and if they find that you misrepresent your answers, your claim is denied and your premiums are refunded. A large portion of claims are paid but the way the questionnaires are asked, you literally need a Dr, a lawyer and an insurance agent to properly answer everything.
You can call the 1-800 number and speak to someone and then get approved for the coverage after giving more information, the issue is that most people don't know that or aren't instructed by the bank employee. The level of pressure to sell these products can be huge and just like other sh**y government policy, its the consumers who are paying the price with poor advice as a result of this battle between banks and insurance companies for your dollar.
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