Whether you’re buying a new home or renewing your current mortgage, your lender or broker will give you the option to purchase mortgage life insurance. Since your home is one of the largest purchases you’ll ever make, this form of insurance makes a great option for homeowners looking to protect their investment now and for many years to come.
What is Mortgage Life Insurance?
As a mortgage borrower, you may be eligible to purchase mortgage life insurance through your financial institution. Meant to protect your dependents from taking on a large, burdensome payment in the event of your death, this type of insurance ensures your family can stay in their home should the unthinkable happen.
How Does It Work?
Mortgage life insurance is paid as an additional premium on top of your regular monthly mortgage payments. The insurance provided will cover part or all of the outstanding mortgage balance, with coverage amounts varying according to your bank’s maximum insurable limit, your mortgage size, and your down payment. Some lenders may also offer additional coverage in the event of a job loss, disability or critical illness.
A form of group insurance, homeowners often enjoy lower premiums and a simple application process - as mortgage life insurance can be easily obtained through the bank when arranging a mortgage loan.
Note: Mortgage life insurance is not to be confused with mortgage default insurance – which is mandatory mortgage loan insurance accompanying down payments between 5% and 20%.
What is Personal Life Insurance?
Personal life insurance, on the other hand, is sold by a life insurance broker and is unrelated to your mortgage loan. With this form of insurance, monies paid out under the policy can be used however your beneficiaries(s) see fit (i.e. to pay off outstanding debts, living expenses, post-secondary tuition, etc.).
How Does It Work?
Personal life insurance is typically set for a specific term of coverage, such as 20 or 30 years. Unlike mortgage life insurance, which ends when your mortgage's balance is paid off, personal life insurance coverage won’t change over your chosen term. However, premiums are subject to change at the end of your term, according to your current age and health. Disability coverage is not generally provided.
Which Is Right For You?
Wondering if mortgage life insurance is right for you? We can help. Our Mortgage Life Insurance Plans are designed to cater to a broad range of mortgage products and will ensure your family (and their home) is protected. You’ll also benefit from affordable premiums, based on low group rates and will never increase as you age.
Applying is Easy
If you’d like to learn more about Mortgage Life Insurance or the many other helpful services we provide, we’re here to answer any questions. You can also get started on our quick and easy online application by simply clicking the button below:
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