MAY 2021
When taking out a mortgage with a lending institution you should cover off that debt with an insurance policy. Not all coverage options are created equal. Let’s look at the highlights of the two options available to you.
Guaranteed Premiums
Individually Owned Term Life Insurance :
Your rates are guaranteed for the life of the policy
Mortgage Insurance from lender :
Mortgage insurance rates are not guaranteed and can increase
Level Coverage Amount
Individually Owned Term Life Insurance :
Coverage amount stays the same even as your mortgage decreases
Mortgage Insurance from lender :
Coverage declines as your mortgage is paid off. Premiums stay the same
Control
Individually Owned Term Life Insurance :
You own the coverage and choose who receives the death benefit
Mortgage Insurance from lender :
Lender owns the policy and they are the beneficiary
Portability
Individually Owned Term Life Insurance :
Coverage remains intact if you switch lenders
Mortgage Insurance from lender :
You need to reapply for coverage if you move lenders
Comfort
Individually Owned Term Life Insurance :
Underwritten at the time of application. No surprises at the time of claim
Mortgage Insurance from lender :
Underwritten at the time of death