Matthew Laker

1. You are not paying for diminishing protection.

I did not think about this at first when I was buying a house. The mortgage insurance pays the balance of the mortgage left at the time of death. That payment goes to the bank and not to you.  

What this means is you bought your house for $400 000. Let’s say there is $200 000 left. You pay the same premium throughout the diminishing mortgage, and they will cover that 200 000 left on the house when you die.

But if you got life insurance for 400 000 to cover the house in case of your death. Your beneficiary get $400 000 to direct where you or they want.  

2. Better estate planning.  

When buying mortgage insurance, you are just thinking about one debit. But what if you could step back, take a financial analysis and assess where you are at and what are your future needs and goals. Life insurance can take into account a broader range of needs and help you better protect your family. The beneficiary can be helped with funeral costs, other debt and provision for a legacy to your grandchildren.  

3. It stays with you. 

If you change lenders, this does not mean that your insurance will move with you. That will mean an increase in cost. Your life insurance will stay with you no matter where the mortgage is. 

4. Health is assessed at the time of underwriting.

What many people do not understand is many mortgage insurance is assessed after you die. So if there was an existing issue you may not be covered. CBC did a series on this.

When you get life insurance it is assessed as you are applying. If the policy is issued that means you have it. That is not the case with the other way.

So do you need a review of where you are at let’s talk.