Prior to saying YES to mortgage insurance, consider a product that is designed to protect you and your loved ones not your LENDER!
When you are approved for a mortgage, your lender will offer to sell you mortgage insurance. That may seem straightforward, however:
Prior to accepting mortgage insurance, you should know that you have other options. Protecting your mortgage with an individually-owned term insurance plan, offers you and your family better guarantees and greater choices. Quite simply, an individually-owned term insurance plan provides better value, more flexibility and in most cases costs less.
Take a look at the differences between protecting your mortgage using an individually-owned term insurance plan versus most lender’s mortgage insurance:
Questions |
Mortgage/Creditor Insurance |
Individual Term Coverage |
|---|---|---|
| Circumstances change if its better for my beneficiaries to use the proceeds from the policy for something other than paying off the mortgage, will they have that option? | Upon death the benefit goes directly to your lender to pay off the mortgage | Yes, upon death the benefit goes directly to your beneficiaries. They decide how to best use the funds. |
| Is the coverage guaranteed | No, your premiums and benefits are not guaranteed. The lender can change or cancel the policy at any time. | Yes, your premiums and benefits are guaranteed for the life of the policy. Only you can cancel or make changes to your policy. |
| Is the coverage flexible? | No your lender will insure you only for the amount of your mortgage. You can’t alter, renew or convert the policy. If you choose to move the mortgage to another lender you cannot transfer the policy. Your coverage ends when the mortgage is paid off or ends. | Yes, you choose from several coverage options and the amount of coverage you want, regardless of your mortgage balance. You can increase or decrease your coverage, renew your coverage and convert to permanent protection. If you renegotiate or pay off your mortgage or sell your home, you can continue your coverage. |
| I pay the premiums, so I would own the policy right? | No you’re part of a group policy owned by the lender. Your lender is the beneficiary. | Yes, you own the policy and you name your beneficiaries. |
| I look after my health, and I don’t smoke, will it make a difference in the amount I pay for coverage? | No, since mortgage insurance is usually provided through a group plan, you pay the same rate for your coverage as everyone else. | Yes, the amount you pay for your coverage is based on your age, health and smoking status. |