The Benefits of Mortgage Life Insurance
Most people put a lot of effort into finding the right home, the right financing and the right home insurance, but spend almost no time thinking about how to protect this important asset in the event of an unexpected death or serious illness in the family. For some, it’s just easier to take the creditor insurance offered by their mortgage lender. For others, they may simply decline coverage because they haven’t been sold on the need. The key to mortgage insurance is: Eliminating mortgage debt in the event of the homeowner's death, and of having extra funds available to help cover mortgage payments at a time the the homeowner is recovering from a life altering critical illness.
Regular mortgage insurance will only pay off your mortgage if you die. The addition of Critical Illness will pay it off even if you get sick and don't die as this will eliminate the stress of the payment – what would you rather lose, your home or your mortgage?
Mortgage Insurance vs. Bank Creditor Insurance
|Situation||Mortgage Insurance||Bank Creditor Insurance|
|Guarantee of Premiums||Yes||Yes|
|Will the coverage stay in place when you change homes or mortgage lenders||Yes – coverage is portable||No|
|Is the coverage convertible||Yes – coverage is convertible to lifetime coverage without medical requirements||No|
|Are preferred rates an option||Yes||No|
|Can the insurance ever be cancelled||No – once approved the insurance can’t be cancelled should your health deteriorate||Yes – insurance can be cancelled each time the mortgage is renewed|
|Can the Client choose the beneficiary||Yes||No|
|Will the premiums change overtime||No – the premium and the coverage will NOT change for 10 years||Yes – the premiums will change every 5 years|
|If the mortgage is transferred how will this affect the insurance||Should the mortgage be transferred to a different financial institution the insurance would be transferrable||Should the mortgage be transferred the insurance would NOT be transferrable and reapplication and medicals will have to be undergone again|
|Can various types of insurance be combined||Yes||No|