The biggest purchase of your lifetime needs protection.
Mortgage life insurance provides your family with financial relief if you die. Where you buy your coverage will decide whether they win or lose. We’ll give you the knowledge to make the right choice now before it’s too late.
Mortgage insurance protects your family from being saddled with a massive mortgage debt if the mortgage holder unexpectedly dies. The coverage amount is intended to match the mortgage amount and amortization period – along with the freedom as to whom the policyholder wants to name as the beneficiary for the proceeds in an unexpected death.
You’ve got options, but some are much better than others.
There’s a difference between what a bank offers you for “mortgage protection” versus what a life insurance company guarantees you with “mortgage life insurance.” If you find yourself in a position to choose between the two, always take the latter, the mortgage life insurance from a life insurer. Let’s explain in greater detail.
- Mortgage life insurance purchased from a life insurance company protects your family from financial ruin if you or your spouse dies.
- Banks want to be paid back the mortgage debt if you or a spouse die. Protect yourself, not the bank.
- With mortgage life insurance you own the policy, choose the beneficiary, and select the type of coverage you want.
- Whatever the bank offers you, they will be the beneficiary.
- Your policy will continue when you move and you don't have to buy a more expensive policy (if you are older).
- The banks protection runs out when the house is sold or traded.
- Upon death, with a life insurance policy your family has the option of paying off the mortgage or investing the funds if the economic conditions warrant it.
- The banks coverage does not allow this. The mortgage must be paid off upon death regardless of other investment opportunities.
- Mortgage life insurance provides you choices. You choose the type of policy and benefits you want. Term plans can be converted to a permanent plan without a medical.
- Banks coverages are conservative. Limited plans and benefits offered and no conversion privileges.
- Mortgage life insurance provides you accessibility! Upon mortgage renewal, you are not tied to one lending institution and can shop around for a better mortgage rate.
- Banks coverage must remain with the lender. If you shop your mortgage on renewal and switch lenders, you will need to reapply for new coverage at a higher rate.
- Mortgage life insurance allows you to choose the amount of coverage you require and the coverage does not decrease as the mortgage is reduced.
- The bank will require coverage to be equal to the mortgage and decreases as the mortgage is reduced, the price will not.
- Life insurance policies have built in grace periods from 30 to 90 days for missed premiums.
- A missed payment often means lost coverage when insured with a bank.
- After your mortgage is paid off, you can convert your mortgage life insurance to a permanent policy, or renew for another term.
- There is no option to convert or renew your policy after it expire. You will be forced to purchase a policy from a life insurance company, and if there have been any changes to your health, you risk paying very high premiums.
- You deal with a licensed insurance advisor who has your best interests at heart. They work entirely on your behalf to ensure you have adequate coverage and low premiums.
- You deal with a bank mortgage specialist who knows next to nothing about insurance. They also work directly for the bank and do not have your best interests at heart.