Mortgage life insurance protects your family’s home in the event of the unimaginable.
Anyone who has ever signed the dotted line at the bottom of a mortgage agreement knows emotions it brings. In addition to all that excitement surrounding your new home is the unease of the “what ifs?” What if you lost your job or injured yourself? How would you pay your mortgage, and what would happen to your family’s home? Mortgage life insurance attempts to provide some peace of mind by covering one of the most important financial commitments you’ll probably ever have.
Mortgage life insurance provides coverage in the form of paying out your mortgage to the lender. So, if the principle on the mortgage were to die with $150,000 still owed on the mortgage, the lender would receive the death benefit and the title on the house cleared. It is important to note that the premiums you pay for mortgage life insurance don’t decrease over time. Instead, what you pay is based on the initial amount you borrow. What does decrease though is your death benefit.
Many people choose term life insurance over mortgage life insurance as its death benefit never decreases. Perhaps the most obvious downside to with mortgage life insurance is that since it only covers the remainder of your mortgage and is paid directly to the lender, you don’t have a choice of how or where to allocate the death benefit. With term life insurance, if you have more pressing debts you can instead decide to pay those off first. Another advantage of term life insurance is that its death benefits never decrease. Perhaps the biggest benefit is that it is usually cheaper as well.
If you are looking to cover the cost of your mortgage it is important to discuss your options with a licensed advisor. LifeInsuranceCanada.org is supported by a network of independent Canadian insurance brokers. Many times simply being aware of your options results in better confidence when it comes to making a decision. If you would like to speak to a licensed advisor in your area simply request a quote, answer a few questions and we’ll take care of the rest.
