AXA offers all-in-one mortgage insurance policy

By Alain Thériault | June 20 2011 06:02PM

On Oct. 1, AXA Canada introduced Loan Insurance, a credit insurance product that offers life coverage with multiple terms. Insured can tack on disability, critical illness and assistance.

The life component: offers a choice between 10, 15, 20 and 25 year terms for individual, joint-first-to-die or multi-life, up to six individuals. The life insurance amount can be fixed or decreasing term based on a 7% interest rate loan, with a floor of 15% of initial insured capital.

Insured that purchase life coverage can then choose to add other protection. The first option is total disability protection, from ages 18 to 55 for maximum benefits of 1.5% of the loan value. Clients can also beef up their loan insurance policy with coverage for a lump sum of $20,000 should they be diagnosed with one of the three main critical illnesses. They can also add the AXA Assistance guarantee that gives access to medical references and legal aid.

The product is reserved exclusively for borrowers. “We are targeting all borrowers, whether it be for a mortgage first time home buyers, home equity line of credit, or personal and commercial loans,” says Sylvain Charbonneau, Principal Director, Marketing and products, AXA Assurances.

“The product is very competitive and is advantageously positioned for 20 and 25 year terms,” Mr. Charbonneau continues. “For example, a 35-year-old male non-smoker can obtain 25-year-term life coverage that includes fixed insured capital of $150,000, a disability benefit of $1,000 per month for two years, critical illness coverage, guarantee of insurability and assistance for less than $50 per month.”

The product consolidates and simplifies the characteristics of the two existing products: Decreasing Term Plus and Mortgage Insurance, which will disappear on Dec. 31. “The new product is simpler because it is not necessary to detail the financial need, which corresponds to the loan amount. So there are fewer questions during the proposal and it is faster to issue,” Mr. Charbonneau points out. Proof of loan may be requested upon subscription.

By consolidating various niches in a single product, AXA hopes to tap into a vigorous market. “Our objective is to double our sales in the next two to three years,” Mr. Charbonneau says.

Alain Thériault