Better Insurance for Your Mortgage
When you apply for a mortgage, the lending institution will offer you what they call mortgage insurance. This insurance is bundled into your mortgage payments, and covers the repayment of your mortgage in case you die. This sounds like a good and convenient solution, but you can do better!
We recommend that you just say “No” and get your individual life insurance from an insurance broker. The reasons are as follows:
It’s about control.
With the mortgage life insurance offered by most lending institutions, the lender owns the policy, and if you find a better mortgage rate at another lending institution, you may have to re-qualify medically for the life insurance protection. Usually, your mortgage life insurance cannot be moved to another institution. Your lender automatically pays off the mortgage if you die. Your beneficiary has no choice about how to use the funds, at a time when funds may be required the most. You have a lending institution employee to look after you.
With personal life insurance, you own the policy - not your lender. You have the freedom to switch your mortgage to another lending institution without jeopardizing your life insurance coverage. Your beneficiaries can choose how to use the funds— to pay off the mortgage, provide a monthly income or take care of a more immediate need. It’s their choice, not your lender’s. You use your own insurance and financial advisor to arrange and service the policy. You’re in control.
It’s about getting the most for your money.
With the mortgage life insurance offered by most lending institutions, the cost per thousand of coverage generally increases every year. When you think about it, costs may increase while coverage decreases. The insurance protection stops when the property is sold.
With personal life insurance, you choose the type of insurance that best suits your needs with premiums to suit your budget. We offer a range of term and permanent life insurance solutions. You can choose a plan that will keep the premium you pay level for 10, 20 years or for your lifetime. The insurance protection stays in place even if the property is sold. This way, not a penny is wasted!
It’s about being covered.
Generally, mortgage life insurance from most lending institutions is non-convertible term insurance—there are no cash values, no premium flexibility or ability to move to a permanent life insurance policy if your needs change. Usually covers the exact amount of your mortgage. And your coverage decreases as the mortgage is paid down. This means you have no coverage when the mortgage is paid off.
With personal life insurance, you select the plan that meets your needs. Our convertible term life insurance products are fully convertible to permanent policies, so if your health changes and you find it difficult to get life insurance, you can keep the full death benefit and convert your insurance to the permanent insurance policies available at that time without having to re-qualify medically. Your coverage doesn’t decrease as the mortgage is paid down. This means additional funds could be available at a time when your family may need it the most. Or you could reduce the face amount when you want. Isn’t this way a wiser option?
Buying a home is often the most significant investment a person makes in their life. Some simple financial planning around your home purchase can make all the difference. Contact us to arrange a meeting, and let us show you how we can help people like you!
