While having insurance to protect your home is a necessity, Mortgage Insurance may not be the best route to take when doing so. We would encourage you to consider purchasing your own Life Insurance policy instead, as the advantages to doing so are significant and your house will still be insured. Below you can view a side-by-side comparison of the two.
Personal Term Life Insurance Policy
Mortgage Insurance Policy
- Life Insurance for a set term of your choice (5,10, 20 yrs)
- Insured owns policy
- Typically cheaper than Mortgage Insurance
- Premiums and coverage amount stay level throughout the term
- Coverage can not be cancelled by the insurer, only the insured
- You choose the beneficiary (if there is an outstanding mortgage balance, the beneficiary would pay off the mortgage and receive the rest).
- Underwriting is done prior to Insurance company offering the policy, giving a greater chance for pay out
- Insurance is yours until term is complete
- Life Insurance for the term of the mortgage
- Bank owns policy
- Typically more expensive than Term Life Insurance
- Premiums stays level, but coverage amount may decrease as your mortgage decreases.
- Coverage can be cancelled by the bank at any time.
- Bank is the beneficiary only
- Underwriting may be done at time of death, leaving a very real possibility of not being paid out.
- Insurance from a bank is not portable. If you change banks or homes, you will need to re-qualify for insurance.