Mortgage Insurance versus Life Insurance
10 Reasons Why You Should Use Life Insurance Instead
1. Mortgage Insurance claims don’t always pay out.
The reason for this is that the bank does most of the medical underwriting after death whereas individual Life Insurance ensures that proper medical underwriting is done so that when the worst happens, your family will get paid in full.
2. Price – Life Insurance is always less expensive.
Mortgage Insurance from the bank is always more expensive than life insurance. It’s usually over 50% higher than life insurance when comparing it to a Term 10 or 20.
3. Mortgage Insurance is essentially a Term 5.
4. Mortgage Insurance provides you with declining coverage.
Mortgage Insurance with a lender declines as your mortgage is paid down. Life Insurance coverage and premiums remain the same for the term.
5. Mortgage Insurance is not portable.
Mortgage Insurance is only tied to your mortgage, individual life insurance is tied to you so you can take it wherever you go.
6. Mortgage Insurance means the bank is the beneficiary.
With Mortgage Insurance the bank is your beneficiary. However, with life insurance in Canada, you choose your beneficiary and they can decide what to do with the money based on their needs
7. Mortgage Insurance does not have preferred health prices.
With Life Insurance you can qualify for great price breaks if you are in good health. These are called preferred rates. Mortgage Insurance does not reward good health.
8. Mortgage Insurance can never be a permanent solution.
With an individual life insurance policy you can convert a term policy into a permanent insurance policy without having to do a medical. So you don’t have to worry about being uninsured if you get sick or have to move or switch mortgage providers.
9. Mortgage Insurance does not pay double if you both die!
Individual Life Insurance pays double the pay out on simultaneous death.
10. Mortgage Insurance won’t let you lower your coverage!
Life Insurance gives you the Option to Lower Your Coverage. With this option you can reduce your premiums if you choose to reduce your coverage. make sure you research Life Insurance Canada to get the best life insurance quotes.