Mortgage insurance is easy to apply for. Typically, all that you are required to do is answer a few basic questions about your health. If your answers are favourable, the bank offers you insurance coverage on the spot. Only if you answer unfavourably will the insurance company investigate your health.
While this may sound like an easy way to purchase insurance, keep in mind that because insurability may not be fully verified before the policy is issued, there is a higher risk that the claim might not be paid. If this were to happen, your family’s only recourse would be legal action against the insurance company. This process could take years and, in the meantime, your mortgage payments must continue.
When you purchase personal life insurance there are a few additional steps that must be taken. First, you may have to complete a lengthy application. Second, you will most likely be asked to provide the insurance company with more concrete evidence of your health. Urine or blood tests are not uncommon requirements. This process may not be quite as simple as the lending institution’s, but your insurability will be verified before the insurance coverage is issued.
All of this investigation into your health is done to ensure that there are not any unfavourable health problems which could make you uninsurable. The more information the insurance company has, the more confident you can be that the claim, when it is made, will be paid out with no delays.