Is Mortgage Life Insurance for Everybody?
Everybody needs mortgage life insurance so that, in case they die, their family can continue to live in the family home. Let’s not bury our heads in the sand and not discuss this important issue, since by doing so leaves your family defenceless.
Most mortgage life insurance policies are the kind that goes down as the mortgage goes down, under the assumption that you need less coverage over time.
Now, however, with so many homeowners refinancing, it usually makes more sense to get mortgage life insurance that doesn’t decrease. This is the difference between fixed term and decreasing term mortgage life insurance.
Mortgage insurance given by banks and lenders is typically decreasing term insurance. This kind of insurance will not protect you fully after the first couple of years. You won’t be able to continue to rely on it if you buy another home, or if you refinance. This is because your policy is with the lender, so once you are not dealing with the lender, the policy will no longer be available. Having a policy that decreases in value may not cover you in many circumstances, such as refinancing your home.
However, if you are smart enough to obtain your mortgage life insurance from a professional insurance broker, you will keep the policy, through different homes and different lenders.
There are many other benefits from obtaining your policy from an insurance broker rather than your lender. There is also the benefit of dealing with an insurance professional instead of a bank loan officer, who really knows nothing about insurance except this one type he has been instructed to sell to you.
Owning and controlling the mortgage insurance policy for your house will give your family a lot more protection. When you buy your policy from a lender, they have the control, not you. Because of this, they will be able to put in restrictive requirements that do not protect you, such annual reviews.
Even if your health was good at the time of application, if you do not pass the review, your insurance can be cancelled at the whim of the lender in a few years.
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More Examples:
- $260000 mortgage insurance (life and disability) for a 29 years old male (non-smoker) and a 32 female (non-smoker): Laurentian Bank: $136.77 per month. InfoPrimes.com: $45.25 per month. Savings: $27456 over 25 years.
- $125000 mortgage insurance (life) for a 47 years old male (non-smoker): Bank of Montreal: $58.59 per month. InfoPrimes.com: $24.98 per month. Savings: $8066 over 20 years.
- $210000 mortgage insurance (life) for a 22 years old male (non-smoker): TD Canada Trust: $20.6 per month. InfoPrimes.com: $16.22 per month. Savings: $1840 over 35 years.
- $85000 mortgage insurance (life and disability) for a 38 years old male (non-smoker): Royal Bank of Canada: $30.39 per month. InfoPrimes.com: $21.73 per month. Savings: $2598 over 25 years.
- $190000 mortgage insurance (life) for a 32 years old female (non-smoker) and a 32 male (non-smoker): Scotia Bank: $43.08 per month. InfoPrimes.com: $15.31 per month. Savings: $11663 over 35 years.
The Province of Manitoba, Canada, a beautiful agricultural area known for its wheat production is located right in the middle of Canada, extending from Hudson Bay to the United States. Winnipeg is the capital of the province, and also its most populated area, with a population of 730,000, out of Manitoba’s overall population of 1.2million. This province, the first to become a member of the nation of Canada after it was formed by the four original provinces, is believed to be named after the Cree word for “strait of the spirit”. Manitoba is famous for its lakes, with Lake Winnipeg the largest fresh water lake in the world, in addition to other large lakes such as Lake Manitoba and Lake Winnipegosis and more than 100,000 small lakes covering 15% of its surface area. Traders from the Hudson Bay Company founded Fort Nelson in 1682 and later explorations took them south along Manitoba’s rivers to the prairie area, where other explorers, both British and French settled, but the territory was ceded to Britain after the French and Indian War in 1763.