In the first part of my Three Part Series on Mortgage Insurance, I have shared why you should consider having a Mortgage Insurance to cover your Private Housing Loan and not to wait to sell of your Property and that a Mortgage Insurance would be beneficial to you because:
- The Premium is the lowest as compared to Whole Life, Endowment, Level Term and even Decreasing Term Insurance
- Mortgage Insurance is portable among Mortgage Loans.
- You can still keep your Mortgage Insurance Plan to form part of your Financial Planning Process
And in this Second Part of the Three Part Series, I will be sharing with you on the Underwriting Requirements when you apply for your Mortgage Insurance.
To start off this Second Part, I shall share with you when can you start applying for your Mortgage Insurance and why so…
When Should You Apply For Your Mortgage Insurance And Why So…
You should actually start applying for your Mortgage Insurance right after you (and your partner) have signed your Mortgage Loan Agreement. The reasons so being that once you have signed:
- You are responsible for the Loan itself even if your Property should be ready in few years time
- And should you apply in a few years time (to match your actual loan disbursement), your Mortgage Insurance Premium may have increased and also should your health status changes a bit by then, you may have issues getting the Plan as Standard.
If you are worried that you are getting in too early for your Mortgage Insurance, you can actually increase your Sum Assured (matching your loan amount) by another 5% – 10%. To plan this well, you can consult your Trusted Financial Planner and go over the Benefit Illustration (quotation) to reflect the actual coverage upon Loan Disbursement.
What Documents You Need To Prepare For Your Application…
- Your Loan Agreement if you are applying less than a year of your Loan Disbursement
- Your Loan Statment if you are applying a year later and A Personal Statement to explain why you are applying after a year or more after your Loan Disbursement
- Your Recent Medical Report (if any and within the last 6 months range). This can help to give evidence of your health status even if you should do badly for the current one or to provide support evidence of your current medical condition. This can also help to waive off some of the tests required for your Application
- Your Recent 3 Years Income Tax Return Slip, if your sum assured is over a million, or upon request by the Underwriters to verify that you can be assured at a High Amount. Most underwriters will peg at 16 – 18 times of your Annual Income to match your Maximum Sum Assured you can go for.
- If your Sum Assured is above $500,000, you will need to complete a Financial Questionnaire to give more information on your current Financial Situation (assests, liabilities and such) and/or Lifestyle Questionnaire to share information on whether you may have abnormal lifestyle.
Underwriting Requirements For Your Mortgage Insurance Application…
These are the common underwriting requirements for your Mortgage Insurance but please do consult your Financial Planner on the actual requirements needed.
According To Age Group And Sum Assured:
- Age 21 to 39, normal routine medical check if your sum assured is above $300,000 to $500,000. Anything above $500,000 would require you to go for ECG (treadmil or resting) and Chest X-ray.
- Age 40 to 49, normal routine medical check for sum assured of above $200,000 to $300,000. Anything beyond that would require ECG and Chest X-ray.
- Age 50 to 60, normal routine medical check for sum assured of above $100,000 to $150,000. Anything beyond that would require ECG and Chest X-ray.
Do note that some Insurance Companies would take into account your current coverage with them and add on to your Sum Assured under the Mortgage Insurance to determine the medical checks needed.
Also note that more specific medical checks would be required if you have any current medical condition(s).
If Your Sum Assured Is Above $1.2 million:
You may be needed to go for the below:
- Routine Medical Check
- Chest X-ray
- HIV Test
- Treadmill ECG
- Lipid Profile Test (at least 8 hours of fasting required)
- Liver Function and Hepatitis B screening tests with e-antigen
- Renal Function Test with Urine Feme
- Full Blood Count
- Fasting Blood Sugar
- Serum Uric Acid
- ESR (erythrocyte sedimentation rate)
This Thing About HIV And Blood Test…
There’s no two ways round Blood Test especially if you are scared at the sight of Blood. To avoid going for any Blood Test, the only alternative is to go for a lower Sum Assured even if it’s below the actual Loan Amount. Do remember that being covered is better than not covered at all.
If you are worried about doing a HIV Test (could be due to some privacy issue), in my course of work, I have checked out that there’s actually a non-invasive HIV test out in the market – by using your Saliva only. Do check with your Financial Planner on whether the Underwriter can accept the result from this test.
How To Ace The Medical Checks…
I have written about this in my last two posts and you can check them out here:
- You Are Unhealthy For Your Insurance… What Happen Now? Part 1 of 2
- You Are Unhealthy For Your Insurance… What Happen Now? Part 2 of 2
In general, the basic tips that I can give to help you ace the medical checks would be
- Enough Sleep,
- No Unhealthy Lifestyle before the Checks,
- Drink Lots Of Water,
- Do A Bit Of Exercise and
- Have A Healthy Diet
With this, I shall mark the end of my sharing in the second part of the Three Part Series. In the last part, I shall be sharing on why you should consider getting a Mortgage Insurance rather than a Level Term or Decreasing Term to cover your Mortgage Insurance. Or on what grounds would a Term Insurance be beneficial to you!
