Protecting Your Mortgage with Life Insurance
Life Insurance and Mortgage Insurance are two types of insurance offered to Canadians designed to provide security and protection to individuals and their families. While both serve to safeguard against unforeseen circumstances, they differ significantly in terms of benefits and coverage.
Mortgage Insurance
Life Insurance
Payout shrinks over time as the mortgage balance is paid off, and can only be applied towards your mortgage, nothing else.
Benefit Amount & Flexibility
Guaranteed, level payout amount throughout the term, which can be used for anything, not just the mortgage.
Post-claim underwriting means you may not be guaranteed a payout if the lender finds a reason to decline the claim after you pass away.
Security
Underwriting is done beforehand, and you are approved for life insurance before you obtain your policy.
You do not get a chance to get better rates if you are healthy, and the premiums change when you renew your mortgage.
Premiums
Premiums are competitive based on health and stays the same throughout the term.
The lender owns the policy and is the only beneficiary.
Ownership & Beneficiary
You own the policy and choose the beneficiary.
Coverage ends when you move or refinance, and you’ll need to reapply.
Portability
Coverage remains intact even if you move, refinance, or pay off your home early.
Benefit Amount & Flexibility
Mortgage Insurance
Payout shrinks over time as the mortgage balance is paid off, and can only be applied towards your mortgage, nothing else.
Life Insurance
Guaranteed, level payout amount throughout the term, which can be used for anything, not just the mortgage.
Security
Mortgage Insurance
Post-claim underwriting means you may not be guaranteed a payout if the lender finds a reason to decline the claim after you pass away.
Life Insurance
Underwriting is done beforehand, and you are approved for life insurance before you obtain your policy.
Premiums
Mortgage Insurance
You do not get a chance to get better rates if you are healthy, and the premiums change when you renew your mortgage.
Life Insurance
Premiums are competitive based on health and stays the same throughout the term.
Ownership & Beneficiary
Mortgage Insurance
The lender owns the policy and is the only beneficiary.
Life Insurance
You own the policy and choose the beneficiary.
Portability
Mortgage Insurance
Coverage ends when you move or refinance, and you’ll need to reapply.
Life Insurance
Coverage remains intact even if you move, refinance, or pay off your home early.
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