Sure, Mortgage Life Insurance is Important, But Why?
First of all, understand that mortgage life insurance is made to pay off your mortgage if you pass on. Let’s not put our heads in the sand and avoid discussing this important issue, since by doing so leaves your family defenceless.
Mortgage life insurance normally follows the amount of the mortgage so that as your mortgage goes down, so does the amount of the insurance.
This isn’t necessarily the case today, when people move more and also refinance, so that their mortgage insurance should stay constant. Here is where there is a major difference between a bank’s insurance and an insurance company’s insurance.
Lenders’ mortgage life insurance policies are normally these types of “decreasing term” policies. What it means is that, after some years, you will no longer have any insurance. You won’t be able to continue to rely on it if you move, 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. This is not practical for many homeowners since they frequently will refinance their homes, for various reasons.
If you get your mortgage life insurance from an insurance company, however, instead of your lender, your policy stays in place, through thick and thin.
This is one of the most important advantages of a policy from an insurance firm instead of from a bank. Additionally, never underestimate the value of dealing with a professional insurance consultant, rather than a banker who is selling an insurance product.
A major advantage is that you, rather than the lender, own and control the policy. If you get your policy from the bank, they control the policy. The lender can, and does set limiting requirements that may endanger the policy, for example reviews every few years.
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:
- $310000 mortgage insurance (life) for a 51 years old female (non-smoker): Scotia Bank: $160.5 per month. InfoPrimes.com: $49.76 per month. Savings: $26578 over 20 years.
- $125000 mortgage insurance (life) for a 47 years old male (non-smoker): National Bank: $55.86 per month. InfoPrimes.com: $24.98 per month. Savings: $7411 over 20 years.
- $210000 mortgage insurance (life) for a 22 years old male (non-smoker): CIBC: $18.31 per month. InfoPrimes.com: $16.22 per month. Savings: $878 over 35 years.
- $204000 mortgage insurance (life and disability) for a 27 years old female (non-smoker): National Bank: $35.23 per month. InfoPrimes.com: $23.8 per month. Savings: $4115 over 30 years.
- $208000 mortgage insurance (life) for a 37 years old male (non-smoker) and a 40 female (non-smoker): CIBC: $63.48 per month. InfoPrimes.com: $36.55 per month. Savings: $8079 over 25 years.
Located on the southeast coast of Canada, Nova Scotia is the second smallest province in the country, with an area of only 21,300 square miles, but is its second most densely populated. The region was the home of the Mi’gma’gi people before the arrival of Europeans, for French colonists established a permanent colony in 1604 at Port Royal, establishing what would become Acadia, but the British took control of the region between 1713 and 1760, establishing their own capital of Halifax in 1749. Nova Scotia is one of the four founding provinces of the nascent nation of Canada. It is a province that is almost completely surrounded by the Atlantic Ocean and there is no section of the province is further from the ocean than 67km. John Cabot most likely discovered the area in 1497, and after the French settled Port Royal in 1604, the British claimed it in 1620 by declaring all of the shoreline from Acadia to the Chesapeake Bay to be New England and subsequently Scottish settlers arrived; the provenance of the area switched between France and Britain for most of the 18th century, but when the British took over entirely, they required allegiance from all residents; Acadians who would not were expelled in what is now called the Great Expulsion.