MORTGAGE TERM INSURANCE PROTECTION

LENDING INSTITUTIONS VS. PERSONAL INSURANCE COMPANIES

• Your lender owns the policy. If you find a better rate at another lending institution, you may have to re-qualify medically for insurance protection.

• The lender automatically pays off the balance of your mortgage if you pass away. Your beneficiaries cannot decide how to use the funds.

• You have a lending institution employee to look after you.
  
  
   

• The cost of coverage may increase every year while coverage remains the same.

• Insurance protection stops when the property is sold.

• Generally, mortgage life insurance from lending institutions is non-convertible - no cash values, premium flexibility, or ability to switch to a permanent insurance policy.
  
  
  
   

• Lending institutions usually cover the exact amount of your mortgage.

• Your coverage decreases while you pay off your mortgage. Once the mortgage is fully paid off, coverage stops.

• Late mortgage payment = late mortgage insurance payment. At most banks, you lose your protection after 90 days.

• The critical illness protection covers few basic illnesses.

• You own the policy. You are free to switch your mortgage to another lending institution without jeopardizing your life insurance coverage.

• Your beneficiaries decide how to use the funds - pay off the mortgage, provide monthly income, or take care of more immediate needs.

• Your insurance and financial advisor to arrange and service the policy.
  
  
   

• You choose the best solution and premium from a range of term and permanent insurance plans that maintain your premium level for a specific time period. 

• Insurance protection continues even if the property is sold.

• Most personal term life policies can be converted to permanent policies irrespective of your health changes, with no need to re-qualify medically.
  
  
   

• Your coverage does not decrease while the mortgage is being paid and does not stop once it is fully paid. You may reduce the insurance amount as per your needs.

• Your only obligation is to pay the premium so the policy remains active. Some companies offer a premium holiday.

• Critical illness protection covers 24 major illnesses with or without return of premium.