Just got a call from my insurance agent...was turned down for home-mortgage insurance

[KansDem]

Bought my home 19 years ago and got a home-mortgage insurance policy from the insurance company that handles my auto insurance. No problem. Recently, however, my wife and I tried to upgrade the amount since our house has doubled in value since then. Big mistake. Had to reveal my health history and submit to an exam. Now the company has refused to issue a policy due to my health.

Well, I've only 8 years left on my mortgage so if I can make it through to then, my family won't be affected if I check out after that. And I do have some other life insurance policies that I took out long before my health problems started, including one through my employer. Not enough to cover the mortgage for the next 8 years but at least something's better than nothing.

So the thought for today: Keep your (life/mortgage) insurance policies current and don't...DON'T try to upgrade if you have had some health problems, because half a mortgage payment in the hand is better than a whole mortgage payment in the bush...

[bleedingheart]

1. I have question

if you were just asking for a quote...why did they cancel your existing insurance?

That seems wrong.

Now call me crazy but you should have been able to keep the existing insurance...

[KansDem]

5. Missed a premium payment...

One of those "I thought my spouse sent the payment in" moments. I think we could have been able to reinstate the policy, but we indicated we wanted to increase the amount. That began the whole process which led to the rejection...

[bleedingheart]

8. well that sucks big time

[demrabble]

10. Escrow?

When I make my mortgage payment, it includes principal, interest, and an escrow payment for taxes and homeowners insurance.

That way, I never forget to pay my insurance and taxes.

You might want to check with your mortgage company to see if they offer that service for you.

[KansDem]

12. We do have homeowner's insurance through our mortgage payment

However, that covers the house if it is destroyed due to fire or some other unforeseen event. The mortgage payment was covered through a life-insurance policy that would cover the payment if I should move on to see what eternity looks like...

I still have homeowner's insurance, but the burden would be on my wife to make the whole house payment if I should check out early.

[onecent]

2. Thanks for the heads up. This is good advice to know, we only

have a few years to go like you. You can't be too careful in this world of the New B*** rules.

Thanks

Also, did I tell you? It is bullshit that they can get away with something like this.

[SharonAnn]

14. Home mortgage insurance is usually more expensive than term life insurance.

We looked at the options and were able to do better by getting two life insurance policies rather than one mortgage insurance.

Of course, we were in decent health at that time. Since then, well, not so good. Probably couldn't get it now without paying a lot more.

[KansDem]

15. That's the route to take...

Get it early and keep it current, and think twice about increasing coverage if you suspect your health would be a major factor.

[Marrah_G]

19. They are very similar

One of the differences between the two is the need for lab work and a medical exam (which sometimes show things you didn't know about)as well as the amount of time it takes to have the policy approved. If you are in great health and don't mind the tests and are sure they will come back fine then regular term is the way to go. There is also a new type called "Return of Premium" which costs a bit more but if you don't die then you get all your money back, tax-free at the end of the term.

I definitely agree with SharonAnn: Get your insurance by the time you are 50, pre-40 is even better, get it before any health issues and then make sure you keep it!

Also a few last pieces of advice: Make sure the policy you are buying is NOT an accidental policy ( paying only if you die in an accident) and make sure it is a gauranteed premium for the life of the policy. Your agent may say that is not necessary because premiums never go up, but recently we have seen this happening. And if you ever want to adjust the face value of your policy, get an agent to apply for an additional policy, if it gets declined you will still have the original one to fall back on. Also those great rates you see in advertisements are for super-duper prefered plus people (hardly anyone qualifies)so what you want to do is ask the agent not only for the preffered rates, but also what the standard rates would be. Unscroupulous ones will give you rates for prefered and then come back and try to sell you on standard or rated policies even when they knew ahead of time they you would not get those super -prefered rates.

[Botany]

3. Contact your state insurance commision

Get one person there you can work with and demand that they
work to make sure you get your home covered.

[KansDem]

9. That's a thought...thanks!

But I have a feeling that if I receive any coverage at all, it'll be too costly for us.

[Marrah_G]

4. Hmmm

Your agent should have filed a new policy as a replacement policy with the understanding you would be canceling the original one IF you were approved for this one.

If you have any questions please PM me, maybe I can help.

Note: I am posting from work, which happens to be a brokerage specializing in mortgage insurance.

[KansDem]

7. Thanks, but see post no. 5

I really think we could've reinstated the policy. During the last 19 years or so we missed a couple of payments, but our insurance company would accept a "late payment." Not this time...the request to increase the value led to the exam (the first time I'd ever had to do this) and the resultant "So long, KansDem!"

[Marrah_G]

11. Sorry to see this happen

Frankly your agent should be smacked upside the head. He should have spoken to you about any changes in health issues before hand and then acted accordingly if there were issues that could pose a problem. Also how bad were the health issues? Just because one place declined you doesn't mean another won't approve you.

[KansDem]

13. Pretty bad...

About 3 1/2 years ago I suffered a heart attack. At that time I was diagnosed with diabetes. Although I doing fine now, these two conditions have made me undesirable to insurance companies.

About a year after my hospitalization, I was contacted by a life-insurance sales rep who wanted to see if I wanted to re-evaluate my life insurance policies. The subject of an possible increase in my mortgage coverage came up and I mentioned that I had diabetes and thought I wouldn't be eligible. He said that he had issued policies on diabetics and and done so recently for one of his clients. I asked him about the premium and he told me his client was paying "about $300 a month." I said no thanks and the conversation ended.

I didn't tell him about the heart attack: I figured if I had, he'd probably just laugh and hang up.

[Marrah_G]

16. couple questions

Was the insurance rep who filed to raise the face value of your policy your own agent or was he somone you spoke to when talking to the insurance company about the late payments? I am curious to know because the agent should have asked you about changes in health issues and upon hearing diabetes and a heart attack (diabetes alone is not a huge deal anymore if it is under control) never should have advised you to seek another policy. Something just isn't right here. Out of curiosity, which Insurance Company was it?

[KansDem]

17. Please see your inbox...

:hi:

[Marrah_G]

20. checking now :)

[patrice]

6. Thanks for the tip KansDem!

Can't say our home value has doubled, though we DO live in Cupcake Land, but my husband and I are entering what was previously billed as "the happy golden years" too and we receive calls about creative home re-financing (even now with the market supposedly tanking).

:hi:

[Lex]

18. I always heard it is cheaper & better to get regular life insurance in an amount

that would be sufficient to cover house and living expenses, and NOT get insurance tied directly to making mortgage payments (which is more expensive and less flexible than regular life insurance proceeds).

:shrug:

[KansDem]

21. That may be true...I don't really know...

We do have home-owner's insurance to cover the loss of the house, and I do have a couple of policies for the kids' benefit, but this policy was to cover the mortgage payment so that my wife wouldn't be zapped with having to come up with the whole payment if something happened to me. I think she could manage but it would be difficult. However, since we only have about 8 years left on our mortgage, I'm gambling I'll be around (and working) till then.

Maybe I'm a little miffed because now I feel like a persona non grata to the insurance industry. Almost like a second-class citizen...