I have had a ten-year term life insurance plan to act as “Mortgage Insurance” on my house (no, it is not a Mortgage Insurance product (that is a rip-off (IHMO)), and the ten-year term is about to expire. I received a letter informing me of this and how if I wanted to renew for ten years more, my monthly premium would be 3.45 times higher.
This perturbed me a bit, but I decided that since this wasn’t going to happen until July, I’d have time to shop around and maybe find something cheaper or determine if I needed this policy anymore.
I received a phone call from TD Life Insurance (the Policy provider). A licensed TD agent called, asking if I had read the letter and whether I had any questions. I said I wasn’t happy with the rate increase but knew it would go up but not by that much. The agent sounded sympathetic, and then she said that there was another option. At that moment, my “here comes another one for my horse” incident in my life, and I was not wrong.
If I buy a NEW policy, I could have only a 50% monthly rate increase. However, since it is a new policy, I’d have to answer a medical questionnaire and sign forms stating I was telling the truth about my current health.
I guess this is the Insurance Company attempting to cover itself, assuming an old guy like me might have picked up some disease or bad lifestyle choices, so they want to be sure I have a clean(er) bill of health than most 50 years olds. This is the risk you take buying Term Insurance and not “Whole Life,” and I fully realize this. However, a quadrupling of my rates does seem a little punitive (just my opinion).
I think I’ll shop around a bit more, but I haven’t decided on my next steps just yet.
“My guess is this is the Insurance Company attempting to cover itself, assuming an old guy like me, might have picked up some disease or bad lifestyle choices, so they want to be sure I have a clean(er) bill of health than most 50 year olds.”
I have a different theory. After watching the exposes on CBC about insurance companies not paying out, it seems that it takes a doctor and a lawyer to interpret the policy and whether the questionaire has been answered correctly. This is their “gotcha”; any discrepancy between your answers on the questionaire and something they dig up in your medical records can make the policy invalid when time comes to pay out, regardless of whether the discrepancy had anything to do with what you were treated for or died from.