What is pro-rated coverage?
Life Insurance Coverage.
If your mortgage balance exceeds $750,000 when applying for HomeProtector insurance, please note that life insurance coverage will be pro-rated.
This means that benefit amount is calculated as a percentage of the outstanding balance based on a ratio of the maximum benefit of $750,000 amount versus the outstanding mortgage balance at the time of the HomeProtector insurance application.
| Example | |
|---|---|
| Mortgage balance at time of HomeProtector Insurance Application | $780,000 |
| Maximum HomeProtector coverage | $750,000 |
| Percentage of mortgage balance covered |
$750,000 ÷ $780,000 = 96.154% |
| Borrower passes away and mortgage balance remaining is |
$380,000 |
| Life Insurance benefit payable |
96.154% of $380,000 = $365,384 |
Critical Illness Insurance Coverage
If your mortgage balance exceeds $300,000 when applying for HomeProtector insurance, please note that critical illness insurance coverage will be pro-rated.
This means that benefit amount is calculated as a percentage of the outstanding balance based on a ratio of the maximum benefit of $300,000 amount versus the outstanding mortgage amount at the time of the HomeProtector insurance application.
| Example | |
|---|---|
| Mortgage balance at time of HomeProtector insurance application: | $375,000 |
| Maximum HomeProtector coverage: | $300,000 |
| Percentage of mortgage balance covered: | $300,000 ÷ $375,000 = 80% |
| Borrower is diagnosed with a covered critical illness and mortgage balance remaining is: | $125,000 |
| Critical illness insurance benefit payable: | 80% of $125,000 = $100,000 |
