You can be sure of three main factors determining the premium of your mortgage insurance. Given the same policy, the premiums can be different based on how large the mortgage is, how old the insured is, and whether it is a smoker.
Both kinds of mortgage insurance-life to pay down the mortgage, or disability to continue mortgage payments-use these three things to calculate the premium.
The age and health of the insured is of paramount importance to the insurance company, since that will determine for its actuaries what the chances of paying off the insurance are. A great many mortgage insurance policies do not even require a physical. It is very risky to claim good health without it, however, because the insurance company can deny any claim if it arises from a condition that they can prove to be known to you at the time the policy was issued. Smokers, especially have to be careful of taking a chance on that ever present question: “How will the company know?” The answer is, they will know; if you have a debilitating heart attack, the cause can almost always be found, and you will have paid all that money and still left your family unprotected.
There are two typical policies, regular, which includes smokers and non smokers, which does not (and also includes those who have not smoked over the last 12 months.) Needless to say, this increased risk is built into the various premiums.
Bear in mind that insurance policies that are writable without a physical have previously priced the additional risks into the premium. If you are in excellent health, you may be better off requesting a quote for a policy that requires a medical exam; you may quality for substantially lower premiums.
Age and health are such important components of the calculations that a 50 year old with 18 years left on his $210,000 mortgage will pay more than twice as much as a 38 year old using the same conditions. Lowering the loan amount insured will not change the premium that much. None of this is surprising, because the insurance business is calculated on increasing the collection of premiums and delaying paying of policies.
The amount of the mortgage willhave an impact on the cost of the insurance. Up to about $250,000, the amount covered will not change the premium greatly and will probably fall within the quick quote easy application classes. But once the value of the property insured starts to go up, the insurer will require a full application and an individualized quote, and of course, the property itself will need to be assessed.