10 Things you should know about Mortgage Insurance

Posted on: December 21st, 2018 by Peter Choma

Why should you avoid Canadian Mortgage Insurance

Reason #1 Generally, mortgage life insurance from most lending institutions is non-convertible term insurance. Therefore there is no cash value.

Reason #2 No premium flexibility. You have no flexibility when it comes to premium payments.

Reason #3 No ability to move to a permanent life insurance policy if your needs change.

Reason #4 Usually mortgage life insurance covers the exact amount of your mortgage. And your coverage decreases as the mortgage is paid down.

Reason #5 You have no coverage when the mortgage is paid off.

Reason #6 Your lender owns the policy and if you find a better mortgage rate at another lending institution, you will have to re-qualify medically for the life insurance protection.

Reason #7 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.

Reason #8 The cost per $1,000 of coverage generally increases every year. When you think about it, costs may increase while coverage decreases.

Reason #9 Generally most mortgage life insurance is underwritten at time of claim.

Reason #10 Your mortgage life insurance cannot be moved to another institution. You can not change if another company is offering a better product.