Individual Insurance: Mortgage Insurance

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

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