Mortgage Insurance

Mortgage Term Life Insurance

Life insurance is often referred to as Mortgage Insurance when it’s purpose is perceived to protect dependent survivors against the death of a person paying off a mortgage. Most persons buying Mortgage Insurance usually hear this term for the first time when they have just entered into a mortgage loan agreement with a lending institution and the lending institution recommends that Mortgage Insurance be purchased from them. It is your personal choice that you buy it from them or get it directly from Life Insurance company.

Following are Few Advantages of Mortgage Life Insurance bought through a Life Insurance Company in place of Lending Institution:

Benefit Insurance Company Lending Institution
Greater Control
You own the policy and you can appoint/change the beneficiary who will determine how the death benefit is used. Having the money in hand gives the survivors the choice of whether to pay off the mortgage or invest the money, using the income to cover living expenses and continuing the mortgage payments.
Lending Institute is the sole beneficiary. They simply get paid for whatever is balance on the mortgage.  Whereas your loved ones are left with only the house and not the income which could have been generated with this tax free money.  
Portable
If you want to change your mortgage provider or house the insurance protection is separate from the lender. You will still keep paying the same premium as before.  
If you change your mortgage provider or house. You have to get a new coverage which is based on your current age and health conditions. Your premiums will naturally be higher as you will be older now or Maybe you won’t be able to qualify because your health has changed.
Reducing Term
If you buy a fixed term, your Coverage & Premiums remain the same throughout the term. Most of the time it will cost you same or will be even cheaper as compared to what lenders offer.
What is offered for sale by the lending institution is reducing term life insurance with a death benefit reducing to zero over the life of the outstanding mortgage. You should note, however, that the cost of this coverage at your lending institution does not become less as the outstanding mortgage becomes less.
Conversion to
   Permanent Policy
You can select a policy that has a conversion option that will grant you the option of changing the coverage to permanent protection in the future regardless of your health condition.
This policy doesn’t offers this flexibility.
Additional
   Protection if you
   get Ill
if you become terminally ill and can’t pay your mortgage payments but can still make the insurance payments you policy will pay the death benefit
Insurance payment is part of your Mortgage. You can not pay the later separately.
Group Vs Private
This policy is medically underwritten based on your age and health conditions at the time of the application. You receive a policy contract which is binding to the insurance company to cover your life for the specified amount provided you keep paying the said premiums. It is a guaranteed for the term you have taken, irrespective of any change in your medical condition. The premiums can not be increased either, if you have purchased fixed term insurance.
This type of policy is not medically underwritten based on your age and health condition. Only few medial questions are asked. There is some suggestion that more strict scrutiny of your initial application will take place at time of death claim so the onus falls upon the applicant of full disclosure of state of health at time of application. You don’t receive a policy contract. You simply receive a certificate referring to a master group insurance contract, It also means that coverage is not guaranteed and all policyholders can be cancelled by the insurance company or the lending institution at any time if the risk to them becomes too great.

Based on above comparison, a life insurance broker is your best choice to determine and find the right kind of mortgage
insurance for your particular needs. You can visit www.FinancialWellBeing.ca, to read more about the financial planning products available or fill the form below and a Licensed Insurance Advisor will get in touch with you
within 24Hr’s.

 

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