Mortgage Insurance or Personal Life Insurance..... a no-brainer in my books... here are some reasons why
| Mortgage Insurance | Personal Life Insurance | |||
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The lender (bank) owns the policy
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You own the policy | |||
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The lender (bank) controls the death benefit. The lender will use it to pay off the remaining balance of your mortgage |
You name the beneficiary who controls the death benefit. Your beneficiary can decide to pay off the mortgage, other debt or to replace lost income
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The policy is not portable and is terminated once you change lenders (banks) or your property is sold
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The policy remains in force regardless of who holds your mortgage or if you move to a new home | |||
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The cost usually increases each year while the coverage decreases as you pay off the principal
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The cost is set of a fix period (10, 20 years or for life) and the coverage is constant | |||
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The policy is not convertible to permanent insurance.
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The policy is convertible to permanent insurance | |||
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Your insurability is tested EVERY time you change lenders (banks)
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Your insurability is tested and captured once when you apply | |||
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The coverage is not underwritten and claims are 7 times more likely to be denied.
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Insurance contract is established and can only be denied in cases of fraud. | |||
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Person 35 years old pays $65.00 monthly for coverage of $500,000[1]
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Male, 35 years old pays $40.95 monthly for coverage of $500,000 Female pays $29.70[2]
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http://www.cbc.ca/player/News/TV+Shows/Marketplace/ID/1581783345/?sort=MostPopular
[1] Based on 0.13 per $1,000 of coverage taken off RBC, TD and BMO website January, 2013
[2] Based on Canada Life Term-20 insurance. Term-10 monthly costs are lower (for first 10 years).
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