Does cause of death matter in mortgage insurance?

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My husband has terminal cancer and now our bank is claiming our mortgage insurance is only for accidental death. As long as it’s not suicide, any death occuring before the end ot the mortgage should be covered I would think. Maybe we didn’t read the small print somewhere but this seems like the insurance company is trying to get off paying. Is this how most mortgage insurance is set up?”

Asked January 4, 2016

1 Answer

Homeowners can find it unsurprisingly difficult to understand mortgage rules and responsibilities while dealing with tragic events. What you need to know is that the death of a responsible party or co-signor and the cause of that death do matter when dealing with any type of insurance in the state of Ohio. When a lender or insurance company makes a claim like the one you have outlined, there are two ways that you can interpret the situation:

In the case of a mortgage insurance plan, also known as a home loan or mortgage guarantee plan, you have actually answered your own question to some degree. An insurance document is a legal document. When you and/or your husband signed it, you agreed to the text written on it in regards to this and other related topics no matter the size of that text. Many lenders include fine print on their legal agreements. As a result, it is always in the signing party's best interest to read all of the text before signing because of situations like this one that can occur at any time at a later date. If the agreement states that the insurance does not cover a terminal event caused by cancer, then you and/or your husband agreed to those terms. Your best bet is to ask your bank representative and/or insurance agent to first show you in writing the specific line or lines within the document that state that this particular mortgage insurance plan does not cover a mortgage default caused by a signer having terminal cancer.

If the bank or insurance carrier can't show you these statements in writing, you have options: You should first contact the Consumer Affairs Hotline for the Ohio Department of Insurance at 800-686-1526 and ask for assistance from a Property and Casualty Analyst." If the analyst believes that you have a case, he or she will provide you with additional instructions to guide you through the next steps to proving your case and claim. You can also contact a lawyer that specializes in cases related to insurance discrimination or even fraudulent insurance practices. If you learn that you do not have a case, you still have options. For example, the bank might agree to refinance your mortgage so that you can afford the payments. If you can find someone to cosign, it might offer you an even better agreement.""

Answered January 4, 2016 by tim

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