Is this normal or sleazy in the banking world?

Question

Hey there,

I'm a newbie investor and while getting my first mortgage, the rep, from one of the big banks, included a life/disabililty insurance policy that already had my health questions all answered (all "no"s which was actually untrue making the policy void anyway I believe) and already factored into my monthly mortgage cost.

I declined out of that, which delayed everything because she had to redo the paperwork and seemed put off by it.

Is this what banks normally do?  Seems pretty slimey but maybe I'm naive.

Shawn

Sean McDonnell · Answer

@Shawn French

That is a fairly common tactic, banks combining life insurance with your mortgage.  BUT, it is definitely something your loan officer should have talked to you about beforehand.. It is kind of messed up, but the banks want to make sure that if something happens to you, they will still get paid. A lot of times from what I have seen, the mortgage life insurance is way more expensive than life insurance policies sold separately.

It seems like they tried to pull a quick one on you, and you caught them. Good job!

Mike Bisson · Answer

I took many mortgage and i never had this happen. I always filled it out myself.

You did the right thing because as far as i know your right a lie on it and they can void it.