Mortgage insurance and life insurance both purport to protect your loved ones in the case of your death. But only one will give your beneficiaries the freedom to use those payments to truly suit their needs. That’s life.
Make your next move your best one. Trust life insurance to protect your family—and the roof over their heads.
Mortgage insurance is commonly sold to new homeowners by their banks. At first glance, it makes sense: you buy coverage to make sure your family won’t be responsible for the remaining balance on your home if anything happens to you.
But what your lender might not tell you is that life insurance can be used for the same thing—and more. A life insurance policy can be used towards whatever your beneficiary needs it for. That could mean mortgage payments, of course—but it might also include tuition fees, car payments, camp registration, or a hundred other expenses that make up a well-lived life.
With mortgage insurance, the people you love have no choice about where that money goes. It goes to the bank. What’s more, the premiums for mortgage insurance tend to be higher than for life insurance—and nobody should have to pay more for less.
Here are six reasons why you should pick life insurance over mortgage insurance this home-buying season:
1. When you buy life insurance, you own the policy.
When you buy mortgage insurance, your bank owns the policy, just like they own your mortgage.
2. When you buy life insurance, you decide how much coverage you need.
With mortgage insurance, your bank makes that decision for you.
3. With life insurance, your coverage doesn’t change unless you want it to.
This is another way of saying you get what you pay for with life insurance. Your coverage doesn’t change just because you get older. It only changes when you want it to—either because you purchase more life insurance, or less, or because you select a policy that has a built-in termination date.
Mortgage insurance works a little differently. It covers only one thing: your mortgage—and your mortgage shrinks every time you make a payment. When your mortgage shrinks, so does your coverage. So far, so good. Except the one thing that doesn’t shrink is the cost of your premiums.
4. With life insurance, the healthiest clients generally pay the lowest rates.
Your age, health, and smoking status affect how much you’ll pay for life insurance. For good or bad, the cost of mortgage insurance is one size fits all.
5. With life insurance, you name your beneficiary.
With mortgage insurance, the beneficiary is the bank.
6. With life insurance, the benefits can be used for anything.
Mortgage insurance is a gift you give your bank. Life insurance is a gift you give your family.
In the event of your death, mortgage insurance will (as advertised) pay for your mortgage. Life insurance can be used for literally anything: to repay debts, pay for education, invest in your family’s future, and even—yes—to pay your mortgage.
It's your move—but we can help.
Talk to a Lawyers Financial advisor about life insurance that will keep your family in house and home. And if you already have mortgage insurance, ask about making the switch.
Lawyers Financial Term Life Insurance is sponsored by the Canadian Bar Insurance Association (CBIA) and underwritten by The Manufacturers Life Insurance Company (Manulife) P.O. Box 670, Stn Waterloo, Waterloo ON N2J 4B8. Lawyers Financial is a trademark of CBIA.
