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Obtaining the Lowest Mortgage Insurance Premium

Non-Medically Underwritten Policies

One of the decisions you need to make when applying for mortgage insurance is to decide between fully-underwritten and non-medically underwritten policies. Generally, the Mortgage Insurance Premiums on a fully-underwritten policy will be considerably less expensive than a non-medically-underwritten policy. Because many highly-rated applicants with health concerns apply for non-medically underwritten policies, the companies that issue them must build in more expensive Mortgage Insurance Premiums. These companies are taking on more risk and expect to pay more death claims than companies that fully underwrite their policies and quote Mortgage Insurance Premiums based on the actual health risks posed by applicants. A non-medically underwritten policy may be your best option if you simply don't have time to complete a physical examination or just have a difficulty with needles. Your physical examination could potentially increase your fully-underwritten Mortgage Insurance Premiums. At TermAdvantage, we shop over 2,000 companies offering both fully-underwritten and non-medically underwritten policies to ensure you're obtaining the lowest Mortgage Insurance Premiums available.

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Premium Payment Options

When you take out a mortgage insurance policy, you have many different options for which to pay your Mortgage Insurance Premiums. Depending on the company that issues your policy, you may have the option to pay your Mortgage Insurance Premiums monthly, quarterly, semi-annually, or annually. When you pay your Mortgage Insurance Premiums annually, companies are able to go ahead and invest your full annual Mortgage Insurance Premium an entire year ahead of time. But when you pay monthly, they get a very small portion of your annual income one month at a time. Because companies often have upfront costs and reserve pools they need to fund, most companies will offer slightly discounted Mortgage Insurance Premiums to policyholders who pay their Mortgage Insurance Premiums annually. In some cases, companies will charge an added fee to policyholders that pay their Mortgage Insurance Premiums monthly, and decrease the fee for those who pay their Mortgage Insurance Premiums quarterly and semi-annually, but don’t remove it entirely unless the policyholder pays their Mortgage Insurance Premiums annually.

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Save Money by Adding Riders

There are many different add-ons or riders you can add to your mortgage insurance policy to save you and your family some money. Depending upon the company that issues your policy, you should have an accelerated benefit rider that accelerates the payment of your death benefit in the event that you're diagnosed with a terminal illness. Generally, there is no additional Mortgage Insurance Premium for this type of rider. If you're concerned about the impact an accidental death would have on your family, you may be able to add an accidental death rider, which increases the death benefit paid out to your beneficiary(ies) in the event of your accidental death. There will be an additional Mortgage Insurance Premium for this type of rider . Another popular rider is a return of premium rider (money-back plan). A return of premium rider ensures that companies will pay back all the premiums you paid into your policy, as long as you don't pass away before the end of your term. Each of these riders can reduce your overall Mortgage Insurance Premiums because you're bundling benefits within one policy, but adding any of these riders will always increase your Mortgage Insurance Premiums opposed to simply obtaining basic coverage (pure protection).

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Spousal Rider

If you're married, you may be able to reduce your overall Mortgage Insurance Premiums by adding a spousal rider to your policy. A spousal rider is a secondary policy that is attached to your primary policy to lower your Mortgage Insurance Premiums. The spousal rider is fully-underwritten and will pay out a death benefit if the spouse insured by the rider dies before or simultaneously with the spouse insured by the main policy. Should the spouse insured by the primary policy die first, the spousal rider is null and void—even if the spouse insured on the rider dies the same day. Often, this results in lower overall Mortgage Insurance Premiums because there's less risk on companies having to pay out a death claim, therefore the cost of a spousal rider is significantly discounted. It's extremely important to remember that the rider will not cover the surviving spouse once the spouse on the main policy has died, so a new policy needs to be applied for immediately. This is why most Americans choose to purchase separate policies. You don't have to worry about re-qualifying for the coverage once your spouse passes away. By then, your Mortgage Insurance Premiums will be considerably more expensive (if you're able to qualify at all).

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The Role of Your Medications

Many of the medications you take each day may seem innocuous enough, but in the eyes of an underwriter, these seemingly unimportant medications take on an entirely new meaning. This can result in increased Mortgage Insurance Premiums on your policy. One of the most common medications that increases your Mortgage Insurance Premiums, which people take daily and underwriters see as a potential red flag, are anti-depressants. Anti-depressants can be prescribed over a simple case of the winter blues or after a suicide attempt. Because they treat such a wide range of symptoms that can occur in varying degrees of severity, it’s important to know how to present the medications to the underwriter, so they have a clear sense of the reason they're prescribed. At TermAdvantage, we shop over 2,000 companies nationwide, and know exactly which ones will offer you the best possible health classification based on the medication you're currently taking, in turn giving you the lowest Mortgage Insurance Premiums available.

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