What You Need to Know About Mortgage Life Insurance

Whenever you take out a mortgage you will be offered Mortgage Life Insurance. This is not to be confused with the mortgage insurance that is offered by CMHC, Genworth or Canada Guaranty and is required if you have less than 20% equity in your property. I am referring to insurance that will cover the mortgage in case of death.

Many do not give too much thought about life insurance. Why would you? You are moving into a new home, maybe the first one you have ever owned, which is overwhelming in itself. And the cost….

Well, it is my opinion that you should! Have you ever considered what will happen if something happened to you (death)? Will your family still be able to afford the mortgage payments? Will the kids still have a roof over their heads?

Mortgage Life Insurance coverage would take care of those questions. It would pay out the outstanding balance on your mortgage thus allowing a clear title home to be left behind for your family. They would be taken care of.

Not all Mortgage Life Insurance policies are the same!

Your mortgage broker and the lender will be offering you coverage when signing for the mortgage. These types of policies are easy to get (just sign) and are generally group policies. For those that are too busy and just want coverage this is an easy way to go.

However, I would suggest that you find an independent life insurance agent to provide you with the coverage. Why?

Well, to start they can give you quotes from many different companies. They shop around for you and can probably get you a better deal. Secondly, insurance policies from the lenders only cover you as long as you are a mortgage client. What happens if you transfer the mortgage in the future? The coverage ceases and you will have to buy a new policy. As age is a big determining factor and we all get older, it may cost you more. A policy that is independent of where you bank, work, etc. will provide you with long term coverage without the worry about it ever terminating due to life changes or decisions.

Regardless of where you decide to get your mortgage life insurance coverage, just get yourself covered!