Since the purpose of mortgage insurance is to pay off your mortgage, this protection reduces as your mortgage balance reduces. The benefit to your family at any given time is only equal to the outstanding mortgage balance. However, your premiums are based on the amount of your mortgage on the date you apply. Although the amount of the benefit reduces as you pay down your principal, your premium does not change.
Some mortgage insurance contracts may allow you to request a reduction in premium once you have paid off a certain percentage of your mortgage (i.e. 10%).
Personal insurance is not tied to your mortgage balance. The coverage amount stays level. When you die, your beneficiary will receive the full amount of insurance that you purchased.
Although CBIA premiums may increase as you get older, we only charge what is required for your age. As a result, our premiums are much lower than some other insurers who charge a level premium throughout the period that you are insured.
This table is a comparison of our insurance rates vs. a leading bank. Rates are effective December 1, 2012 and are based on a starting mortgage balance of $250,000, amortized at 4% for 25 years. For the purpose of comparison we have assumed a male, non-smoker, age 31 at the time of application. Premiums stated are monthly amounts.
|Age||CBIA premium||CBIA coverage amount||Mortgage Insurance premium||Amount of outstanding mortgage
|31 – 35||$15.07||$250,000||$32.50||$250,000|
|36 – 40||$15.44||$250,000||$32.50||$217,634|
|41 – 45||$22.42||$250,000||$32.50||$178,182|
|46 – 50||$31.45||$250,000||$32.50||$130,089|
|51 – 55||$46.97||$250,000||$32.50||$71,464|
|Accumulated over 25 yrs||$7,881.00||$9,750.00|