life-vs-mortagage-insurance

We couldn’t be more excited about spring finally arriving to Ontario. After the long and unusually cold winter spring warmth feels like pure bliss. Spring puts people in a real estate state of mind, and odds are, like countless other Torontonians, you are thinking about what your next move might be. Perhaps you are already talking to your mortgage adviser at your home bank branch.

One of the many things to consider is Mortgage Life Insurance. What is Mortgage Life Insurance and how is it different from Term Life Insurance? Do you need either? Do you need both? Let us help you to debunk the hype and the mystery behind it.

The basic idea behind both insurance products is the same. Should the policy holder pass away or become disabled during insurance coverage term the family is not left homeless and destitute. In a fortunate turn of the events policyholder is alive and healthy past the coverage term, and is able to care for the family himself or herself.   The differences between Term Life Insurance and Mortgage Life Insurance are small but significant.

Mortgage Life Insurance will be offered at the time of mortgage closing by any bank employee worth his salary. If you have a family and don’t have a life insurance it IS a good idea. It is all fairly standard and straightforward. You will be asked about your health. If certain answers are a “YES”, additional information will be requested, possibly including a request to undergo a physical assessment. If everything is satisfactory, you are approved and covered for the amount of your mortgage (typically up to $500,000, depending on the bank). Every time you renew your mortgage your Mortgage Life Insurance components – your premium and your health are reassessed. In the event of a claim by your family your insurance provider will re-examine your health history, and if the claim is approved, the insurance provider will pay out the outstanding mortgage balance to the lender.

Term Life Insurance works along the same lines, but is not tied to mortgage. Once you are approved for the Term Life Insurance you will choose the amount to be paid out to your family or the designated beneficiary in case of your disability or demise, and the length of your term coverage. Because the policy is not tied to a mortgage your premiums stay the same throughout the term. Should the claim be made at any point during the term of your coverage the full amount will be paid out and can be used by the beneficiary as they wish: to pay out the mortgage, or to cover additional education, or anything else, or all of the above. Similar to Mortgage Life Insurance, but not the same.

Any big bank will be happy to sell you both insurance coverages. But do you actually need two? And are big lenders your best source? If you need insurance to protect your family, speak to a qualified insurance advisor to determine the appropriate insurance coverage for your family. Happy Shopping!

One of the many things to consider is Mortgage Life Insurance. What is Mortgage Life Insurance and how is it different from Term Life Insurance? Do you need either? Do you need both? Let us help you to debunk the hype and the mystery behind it.
The basic idea behind both insurance products is the same. Should the policy holder pass away or become disabled during insurance coverage term the family is not left homeless and destitute. In a fortunate turn of the events policyholder is alive and healthy past the coverage term, and is able to care for the family himself or herself. The differences between Term Life Insurance and Mortgage Life Insurance are small but significant.

Mortgage Life Insurance will be offered at the time of mortgage closing by any bank employee worth his salary. If you have a family and don’t have a life insurance it IS a good idea. It is all fairly standard and straightforward. You will be asked about your health. If certain answers are a “YES”, additional information will be requested, possibly including a request to undergo a physical assessment. If everything is satisfactory, you are approved and covered for the amount of your mortgage (typically up to $500,000, depending on the bank). Every time you renew your mortgage your Mortgage Life Insurance components – your premium and your health are reassessed. In the event of a claim by your family your insurance provider will re-examine your health history, and if the claim is approved, the insurance provider will pay out the outstanding mortgage balance to the lender.

Term Life Insurance works along the same lines, but is not tied to mortgage. Once you are approved for the Term Life Insurance you will choose the amount to be paid out to your family or the designated beneficiary in case of your disability or demise, and the length of your term coverage. Because the policy is not tied to a mortgage your premiums stay the same throughout the term. Should the claim be made at any point during the term of your coverage the full amount will be paid out and can be used by the beneficiary as they wish: to pay out the mortgage, or to cover additional education, or anything else, or all of the above. Similar to Mortgage Life Insurance, but not the same.

Any big bank will be happy to sell you both insurance coverages. But do you actually need two? And are big lenders your best source? If you need insurance to protect your family, speak to a qualified insurance advisor to determine the appropriate insurance coverage for your family. Happy Shopping!

Similar to Mortgage Life Insurance, but not the same.

5-deferenses-of-life-and-mortgage-insurance

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