250-953-2307Mortgage Insurance
Helps protect your home and family’s financial security with life insurance coverage designed to address outstanding mortgage obligations.
Protect Your Mortgage, Protect Your Family
Your mortgage may be one of your largest financial obligations. Personally owned term life insurance can provide coverage designed to match your mortgage amount and amortization period, helping ensure your family has the financial resources to deal with the mortgage if you pass away.
With flexible term insurance options, the coverage period can often be selected to closely match your remaining mortgage amortization.
Personally Owned Term Life Insurance vs Lender Mortgage Insurance
Mortgage insurance offered by a bank or mortgage lender and personally owned term life insurance can both provide protection for your mortgage, but there are important differences.
With personally owned term life insurance, you own and control the policy.
You Own the Policy: The coverage belongs to you, not your lender.
You Choose the Beneficiary: Your beneficiary receives the insurance proceeds and decides how the money should be used.
Your Coverage Generally Remains Level: The insured amount generally stays the same even as your mortgage balance decreases.
Your Coverage Is Portable: Your policy generally stays with you if you refinance or change mortgage lenders.
Your Term Can Match Your Mortgage: Some plans allow you to select a term that closely matches your remaining mortgage amortization.
You Have Greater Flexibility: Depending on the policy, renewal and conversion options may also be available.
How Does It Compare With Lender Mortgage Insurance?
With lender-offered mortgage life insurance, coverage is tied to your mortgage and the benefit is generally intended to pay the outstanding mortgage balance to the lender. As your mortgage decreases, the amount required to pay it off also decreases.
With personally owned mortgage life insurance, your beneficiary generally receives the full insured amount and can decide whether to pay off the mortgage, replace lost income, pay other debts, invest the funds or use the proceeds for other family needs.
Personally Owned Mortgage Insurance
Policy ownership: You own the policy.
Beneficiary: You choose who receives the funds.
Coverage: Generally remains level.
Portability: Generally stays with you if you change lenders.
Term: May be selected to match your mortgage amortization.
Premiums: Generally fixed during the guaranteed premium period.
Conversion: Certain policies offer conversion options without new medical evidence, subject to policy conditions.
Lender-Offered Mortgage Insurance
Policy ownership: Coverage is linked to the lender’s mortgage insurance arrangement.
Beneficiary: The lender generally receives the mortgage-related benefit.
Coverage: Generally declines with the outstanding mortgage balance.
Portability: Coverage may not transfer when you change lenders or mortgages.
Term: Follows the lender’s mortgage insurance arrangement and applicable renewal terms.
Premiums: Premium arrangements vary by lender and product.
Conversion: Conversion options may be limited or unavailable.
Medical Underwriting, An Important Difference
One important distinction between personally owned term life insurance and lender-offered mortgage insurance is when medical underwriting takes place.
Personally Owned Term Life Insurance
Medical underwriting is generally completed before the policy is issued. The insurance company assesses your health and other risk factors before approving your coverage, providing greater clarity about your insurance protection from the outset.
Lender-Offered Mortgage Life Insurance
Many lender-offered mortgage insurance products use a simplified application process, with further eligibility verification potentially taking place when a claim is submitted. The process varies by insurer and product, so it is important to understand the applicable requirements and exclusions.
More Than Just Your Mortgage
Your mortgage balance is an important starting point, but it may not represent your family’s entire insurance need.
Income Replacement: Consider how your family would manage everyday living expenses if your income were no longer available.
Other Debts: Account for outstanding loans, credit balances and other financial obligations.
Children’s Education: Consider future education costs and other important family goals.
Long-Term Financial Security: Include ongoing living expenses and future financial commitments when determining an appropriate coverage amount.
Find the Right Mortgage Protection
InsureBizz works with leading Canadian life insurance companies to compare personally owned term life insurance options and help you select the coverage amount and term that fit your mortgage and your overall financial needs.
Contact us to explore mortgage protection that you own and control.
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