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How are the premiums calculated for the increase in VMLI coverage?

Published 08/13/2012 09:34 AM   |    Updated 08/13/2012 10:23 AM
How are the premiums calculated for the increase in VMLI coverage?

VMLI premiums are calculated using four factors. These factors include:

  • Your mortgage balance as of the effective date of VMLI coverage
  • Your age as of the effective date of VMLI coverage.
  • The number of months remaining on your mortgage as of the effective date of your VMLI coverage
  • The amount of VMLI coverage

Your premiums for the increased coverage will be calculated using the same factors as when you last obtained VMLI coverage, the only difference will be the amount of VMLI coverage.

We will use the following as an example:

Effective Date of Coverage: August 11, 2005
Mortgage Balance as of Effective Date: $300,000
Insurance Age as of Effective Date: 56
Number of Months Remaining on Loan as of Effective Date: 360

Amount of VMLI Coverage: $90,000
VMLI Premium: $161.66

Using the same factors, but for $200,000 of VMLI coverage:

Effective Date of Coverage: August 11, 2005
Mortgage Balance as of Effective Date: $300,000
Insurance Age as of Effective Date: 56
Number of Months Remaining on Loan as of Effective Date: 360

Amount of VMLI Coverage: $200,000
VMLI Premium: $306.98