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Mortgage Life Insurance Q&A

Why do I need Insurance protection for my mortgage?

Consider who would take over paying for your home in the event of your illness, injury, or death. Inability to make mortgage payments may lead to financial difficulty and the repossession of a home by a lender.

Losing a family member or dealing with a health crisis can be hard enough for a family, and the last thing they need is the unnecessary burden of losing a home. Insuring your mortgage is an important step in ensuring the financial security of your family and your home for years to come.

What is mortgage insurance vs mortgage life insurance?

Mortgage insurance is a form of insurance offered by your mortgage lender to ensure your mortgage will be paid for, either in part or whole, if something happens to you.

In theory, the concept of this type of coverage sounds appealing. However, these plans protect the lender and assure the continued solvency of its business, leaving you and your loved ones on the sidelines.

In contrast, life insurance pays your beneficiaries a lump-sum payment in the event of your death. Your loved ones can use the benefit to pay for credit card debt, post-secondary tuition, or other living expenses. Unlike mortgage insurance, life insurance can be tailored to meet your individual coverage needs.

Does Mortgage Insurance protect my family?

Mortgage insurance is not tied just to the individual borrower but to the particular home purchased, the value of the home, and the remaining balance on the loan.

The primary function of your lender's mortgage insurance is to cover the loan you have been granted.

The value of your coverage decreases as your mortgage is paid down, which means that your insurance policy will decline in value over time and end when your mortgage is paid off. Expenses such as credit card debt, loans, education costs, and everyday living expenses are not covered by mortgage insurance from your lender. With our plan, on the other hand, your loved ones can use the benefit in any way that suits them, not just for mortgage payments.

What is the benefit of Insurance bought independently?

When you get insured independently of your mortgage lender, your policy is much more affordable. You retain full control over the terms and coverage amount you need for your particular financial situation. You have the freedom to choose what is protected, and how long you need protection.

You also have the ability to assign your insurance benefits to whomever you wish, and not just to your lender. Providing your family with an income replacement allows them to have more financial freedom and independence.

Can I switch life insurance providers or policies on my mortgage?

If you are insured under a mortgage policy from your lender, your insurance coverage is tied to the mortgage. Therefore, you would be unable to change providers, convert your policy, or adjust the terms of your policy.

When you get mortgage insurance coverage independently, you can adjust your insurance policy or convert within the policy limits.

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