{"id":14237,"date":"2019-11-25T15:15:00","date_gmt":"2019-11-25T23:15:00","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=14237"},"modified":"2019-11-21T09:00:05","modified_gmt":"2019-11-21T17:00:05","slug":"how-to-protect-the-mortgage-with-life-insurance","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2019\/11\/how-to-protect-the-mortgage-with-life-insurance\/","title":{"rendered":"How to Protect the Mortgage with Life Insurance?"},"content":{"rendered":"<p style=\"text-align: justify;\">There are many compelling reasons already to purchase term life insurance, as anyone with young children or other family dependents knows. It protects your family and loved ones if anything unexpected happens to you \u2013 but it\u2019s not the first thing on a new homeowner\u2019s mind when they think about protecting their new house. Maybe they should reconsider.<\/p>\n<p style=\"text-align: justify;\">If you\u2019re searching for a new home, it\u2019s likely your lender is recommending you purchase mortgage insurance. As life insurance professionals here at PolicyAdvisor.com, with years of experience helping homebuyers like yourself make informed insurance decisions, we have a better recommendation, and that\u2019s purchasing life insurance for your mortgage protection.<\/p>\n<p style=\"text-align: justify;\"><strong>Life Insurance vs Mortgage Insurance<\/strong><\/p>\n<p style=\"text-align: justify;\">Life insurance provides a financial cushion for your loved ones when you die, especially if it\u2019s premature or unexpected. Mortgage insurance offered by your bank over-promises and under-delivers: It only pays off your mortgage debt under similar circumstances. Consider buying term life insurance in the amount of your mortgage instead.<\/p>\n<p style=\"text-align: justify;\">Why? We thought you\u2019d never ask. The best way to determine whether term life insurance for mortgage protection is the better choice is by making a fair comparison.<\/p>\n<p style=\"text-align: justify;\"><strong>1. Your Premiums are Lower<\/strong><\/p>\n<p style=\"text-align: justify;\">Mortgage insurance premiums are typically higher than those for term life insurance. Worse still \u2013 mortgage insurance premiums increase with your age. The reason : with mortgage insurance, there is no personalized risk assessment on your life.<\/p>\n<p style=\"text-align: justify;\">While the procedure for applying for mortgage insurance through your bank appears simpler, it ends up increasing your cost of insurance. Much more work goes into underwriting term life insurance; the insurance company knows more about the risk of covering you, and is therefore able to give a more accurate and a mostly lower price that stays the same throughout the length of your mortgage.<\/p>\n<p style=\"text-align: justify;\"><strong>2. Your Insurance is Portable<\/strong><\/p>\n<p style=\"text-align: justify;\">If you sell your current home and buy a new one \u2013 or if you refinance your home through a different lender, or even if you renew your mortgage with your existing lender \u2013 you have to start from scratch and buy a new mortgage insurance policy. The mortgage insurance policy offered by your bank does not move along with your mortgage. That\u2019s a benefit only available with term life insurance, which stays with you for the length of the term you choose, even if you switch your lender or change your financing terms.<\/p>\n<p style=\"text-align: justify;\"><strong>3. Your Coverage is Consistent and Guaranteed<\/strong><\/p>\n<p style=\"text-align: justify;\">As you pay down your mortgage, the amount of your mortgage insurance coverage also goes down. A lower mortgage payout must mean lower premiums, right? Well that\u2019s not true \u2013 in the case of mortgage insurance, your premium stays the same, even as your coverage reduces.<\/p>\n<p style=\"text-align: justify;\">With mortgage insurance, if you pass away when your mortgage has only a few years left until it ends, the payout isn\u2019t significant, while the premiums stay as high as they were when you obtained or renewed the coverage.<\/p>\n<p style=\"text-align: justify;\">On the other hand, with term life insurance the policy amount and premiums remain the same over the policy term. The payout would be the same whether it is year four or year 24 of your amortization period.<\/p>\n<p style=\"text-align: justify;\">An added bonus? Your coverage is guaranteed when you protect your mortgage through term life insurance, as the insurance company has completed its underwriting when issuing the insurance contract. In the case of mortgage insurance offered by your bank, the insurer does underwriting at the time of claim, and can at that time declare to your dependents that you were ineligible for the mortgage insurance that you had paid for years. Ouch.<\/p>\n<p style=\"text-align: justify;\"><strong>4. You Choose your Beneficiary<\/strong><\/p>\n<p style=\"text-align: justify;\">Term life insurance pays out to the beneficiaries of your choice, most likely your family, but truly anyone you choose. It serves to protect them when you are no longer around. Mortgage insurance, on the other hand, isn\u2019t really designed to protect your family. It\u2019s designed to ensure the bank receives the money they are owed for your home; the fact that your family may benefit from paying off the mortgage is secondary.<\/p>\n<p style=\"text-align: justify;\">It\u2019s quite clear, term life insurance holds significant advantages over mortgage insurance.<\/p>\n<p style=\"text-align: justify;\">We would be remiss not to include the one minor downside to term life insurance in comparison with mortgage insurance. The latter is a simpler procedure. When you close on your home, you can arrange for insurance that same day through your bank or lender with no medical exam. Term life insurance requires more information (like your medical and family history) and work, but many of the steps can be carried out on your tablet or phone. While not instant, the process usually goes smoothly and relatively fast.<\/p>\n<p style=\"text-align: justify;\">And considering the money you can save and protection you gain, most consider it well-worth the effort.<\/p>\n<p style=\"text-align: justify;\"><a href=\"https:\/\/www.zoocasa.com\/blog\/top-4-reasons-to-protect-your-mortgage-with-life-insurance\/\" target=\"_blank\" rel=\"noopener noreferrer\">Top 4 Reasons to Protect Your Mortgage with Life Insurance<\/a> by PolicyAdvisor.com | zoocasa<\/p>\n","protected":false},"excerpt":{"rendered":"<p>There are many compelling reasons already to purchase term life insurance, as anyone with young children or other family dependents knows. It protects your family and loved ones if anything &hellip; [<a href=\"https:\/\/www.roryc.ca\/blog\/2019\/11\/how-to-protect-the-mortgage-with-life-insurance\/\">read more<\/a>]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[],"class_list":["post-14237","post","type-post","status-publish","format-standard","hentry","category-mortgage"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>How to Protect the Mortgage with Life Insurance? &#8226; Rory C Real Estate | Oakwyn Realty<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.roryc.ca\/blog\/2019\/11\/how-to-protect-the-mortgage-with-life-insurance\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"How to Protect the Mortgage with Life Insurance? &#8226; Rory C Real Estate | Oakwyn Realty\" \/>\n<meta name=\"twitter:description\" content=\"There are many compelling reasons already to purchase term life insurance, as anyone with young children or other family dependents knows. 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