CONSUMER BEWARE!
EVEN ON YOUR "MORTGAGE" INSURANCE

It remains unfortunate that we must, as consumers be diligent in our investigations of what products are being offered to us from our Financial Institutions, however, it is time to ask questions and trust only the data that you can confirm!

With that in mind I would like to quote some excerpts from two newspaper articles. The first one is from the National post, Saturday edition, dated November 1, 2003, written by David Menzies from the Financial Post.

"Canada's big five banks love peddling mortgage insurance.. policies that cover the outstanding mortgage on a house in case of the breadwinners death or disability. And 3 out of 5 mortgage holders buy the pitch, purchasing the policies often without asking a single question." (usually we are so busy buying the house, arranging the mortgage, the lawyers and the movers, we just simply sign the papers!)

"Dave O'Laughlin, a financial planner, says that first and foremost, individually owned life insurance offers flexibility. When a homeowner signs up for mortgage insurance, the beneficiary is always the bank that holds the mortgage. If the policy holder dies, the bank gets paid while the surviving family members receive a mortgage free house. However with a Individually owned life insurance policy anyone can be designated the beneficiary."( having control over where the funds goes, gives the survivors more options...important options at a crucial time!)

" A mortgage insurance premium is constant, however the death benefit is declining" "In some cases people actually think they have life insurance but they don't. There have been instances, where the bank refused to pay out on mortgage insurance because the policy holder was afflicted with a medical condition prior to the insurance taking effect. "( mortgage insurance through a financial institution is like group insurance in so much that you don't own it the institution does..comfortable? )"

The second excerpt is from an article in the Ottawa Citizen, dated Tuesday February 13, 2001, written by Dave Brown

"Two separate but similar complaints are on this desk. Both involve widows refused a settlement on mortgage insurance when their husbands died. Both were paying monthly premiums and believe if the insurers accepted the money, they are oblidged to honour the agreement. Both women are learning a little known fact of mortgage insurance. It indulges in underwriting after the fact. Mortgage insurance, actually a life insurance policy sold at the bank, with minimal background checks. If there is a death, the insurance company will take a closer look at the paperwork.

The best way to be assured you have a mortgage covered is to deal through your own Insurance Agent, who will sell you a life policy that will include underwriting before the fact."

To read these articles in full, you can visit either newspapers website!

Are you better off purchasing your own life insurance? Here are only some of the benefits:

• death benefit does NOT decline
• beneficiary is your choice
• you choose the amount you want
• guaranteed to payout

As an Insurance Agent and Certified Financial Planner for 10 years, as well as an ex -Banker for 15 years, I can answer your questions and give you recommendations on what would be the most beneficial type of life insurance for you..

Don't make the decision too quickly! Gather your data and be Consumer Wise!

For more information please feel free to email me at:
terry.sarrazin@clarica.com or call my office at 613-823-7444.

Terry H. Sarrazin, CFP
Certified Financial Planner
1-613-823-7444