Is Mortgage Life Insurance Limiting and Maybe Even Useless?

Real Estate Agent with Professional Realty Group

I had an interview this week with Barbara Lapointe from Sun Life Financial and it was a real eye opening experience.  Our home is generally Canadians largest, single investment and in turn our mortgage is typically our single largest debt.  This is why I had always believed that mortgage insurance is a very important responsibility.

It may surprise you that the mortgage insurance from your bank or lender may not be your best solution.  Barbara explained how individually owned life insurance gives you more options, more choices and greater control over your mortgage protection.  More exciting was that she explained that it can often be at a lower cost.

If you have any questions or would like more information on this information Barbara has stated that she would be more then happy to address all your questions.  Click here for all of Barbara Lapointe's contact information. 

Below is a chart that explains how individually owned life insurance provides you with more options, choices and control when compared to mortgage insurance offered by your bank or lender.


Life insurance from your Financial Advisor: Mortgage insurance from a bank or lender:
  • You Choose a life insurance amount that can cover more than just your mortgage (subject to qualifying).
  • Mortgage insurance only covers your declining mortgage balance.  
  • You may choose to have the premium you pay stay the same while your benefit amount does not decrease over time.
  • The premium you pay stays the same, but the benefit amount decreases with the balance of your mortgage.
  • You choose the beneficiary, who can use the benefit amount in any way, not just to pay off the mortgage.
  • You can't name a beneficiary; the benefit amount is automatically paid to the mortgage lender.
  • Your premiums are based on your health.  If you lead a healthy lifestyle, your premiums may be considerable lower.
  • Premiums are often the same amount for smokers and non-smokers.
  • If you take your mortgage to another lender, your existing life insurance goes with you, so you don't have to requalify.
  • If you take your mortgage to another lender, you may lose your existing mortgage insurance and have to re-qualify for new coverage.
  • As long as you pay the premiums, you keep your life insurance, regardless of your mortgage status.
  • You lose all of your mortgage insurance when your mortgage is repaid, assumed or in default.
  • As the policy owner, you're in charge of your policy.  You can make changes as your needs require.
  • Since you are not the policy owner, you can't change your mortgage insurance as your needs change.
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Your Realtor

Jason Beattie, Realtor

Professional Realty Group

Comments (1)

Kelly McGovern
Realty Concierge International - Bellingham, MA
Working with Kelly is a good move

What a great break down!   Something I am currently investigating.  Thanks for the info!

Mar 01, 2012 10:46 AM