Protect Yourself, Not your bank!

Stay away from Mortgage Insurance BUY Life Insurance¶

When you buy a home, you need a way to help protect yourself and your family financially, no matter what happens. When you review the information at the bank, mortgage insurance seems like a good option. The mortgage will be paid if i die, but is this really the best option for you?

Life insurance is about protecting more than just your home, it also protects what's important in your life. It provides more control as you own it. You choose the product, the options, and you decide who gets the life insurance death proceeds. Your beneficiary will be able to decide how the money is used: pay the mortgage, invest the funds at a much higher rate than the mortgage rate is at or maybe a combination of both. Life insurance is governed by an act of parliament called the Insurance Act - designed to protect the consumer.

With the bank, they own the benefit, and they will only pay down the mortgage... If you qualify at time of need. Bank mortgage insurance is governed by an act of parliament called the Bank Act - designed to protect banks in general. Banks market their life insurance as mortgage life insurance but it is in fact credit insurance.

The coverage:

On a life insurance program: you choose the length of time for your life insurance coverage, you decide the coverage amount, and who will benefit if you were to pass away unexpectedly.

Mortgage insurance: you are covered for the mortgage amount only. The amount decreases as your mortgage is paid down, the coverage amount is decreasing but the monthly premium payment remains the same.

The choices:

You can choose between life, critical illness, and disability insurance with different product options and optional benefits, which allows you to decide based on your current and evolving needs. All products can be purchased separately when you are purchasing your insurance.

With regards to mortgage life insurance, you have limited options. It only lasts until you've paid off your mortgage. The critical illness and or disability insurance is normally a bundle you have to choose with the mortgage insurance, which also only work to cover the mortgage.

Control on the policy:

You own and control all the decisions on your life insurance policy. It's unrelated to your mortgage.

The lender owns your policy so you can't move your mortgage insurance to another lending institution. If you find a better rate for your mortgage, you will have to re-qualify for mortgage insurance and your premium may increase.

Medical evidence:

Your life insurance medical underwriting is done at the time of the application. When the insurance company approves your coverage, you will be covered, with no further need to worry about health effecting the benefit.

With mortgage insurance, medical underwriting is done at time of need, meaning when you die. If you had a pre-existing condition the insurance might be declined, and your premiums may be refunded.

When mortgage is paid off:

Your life insurance policy is not tied to your mortgage, so the coverage stays active until you decide to cancel it. When you stop paying the mortgage with the bank, your insurance stops.