Important: Watch This Video Before You Buy Mortgage Life Insurance from Your Bank or Lender
7 Reasons Your Own Life Insurance Is Better Than the Default Option from Your Bank or Lender
Your Own Life Insurance & Disability Plan
Lender Mortgage Insurance
You name the beneficiary. You decide who gets the money. The mortgage lender is automatically the beneficiary. You choose how the payment is used. It can pay off the mortgage, eliminate debts and provide money for your family. The insurance is paid directly to the lender and covers your remaining mortgage balance. You have no choice. Your coverage amount does not decrease unless you choose. You get what you pay for the whole time. Your mortgage amount reduces over time but your premiums stay the same. You pay more for less over time. Your insurance is portable and tied to you, not the mortgage. You can change your mortgage provider and keep your insurance. Your insurance is not always portable. If you change mortgage companies you may lose coverage. You may have to re-qualify for insurance at the new bank / lender. As long as premiums are paid your coverage is maintained. Even if your mortgage is assumed or in default, the life insurance remains in force. You lose the coverage if the mortgage is assumed or in default. Some types of Life, Disability and Critical Illness insurance give back all or a portion of your premiums if you cancel the coverage. If you cancel your coverage you lose all your premiums. Underwriting is done upfront so you know that you are covered if the worst happens. Often times underwriting is done post-claim and not upfront causing problems when a claim is made.
See What CBC Marketplace Has to Say About Mortgage Insurance
Watch this CBC Marketplace expose on mortgage insurance in Canada and hear real stories Canadians who thought they were covered but weren’t.