Mortgage Insurance Tips

Life Insurance Planning Tips for Home Owners

Quite simply, 10 year term insurance is a fundamentally superior option compared to the bank mortgage insurance. Here are some reasons why 10 tear term insurance is better and much cheaper than bank mortgage insurance:

  • If you are quick paying your mortgage, your bank insurance premium will be relatively high for a rapidly reducing amount of insurance. Individual insurance policies maintain the same coverage. You can reduce the coverage and cost at any time as your mortgage reduces.
  • If you have a low interest rate on your mortgage, having the bank automatically pay off the mortgage may not be the best choice.

  • Once approved, the insurance cannot be cancelled should your health become a problem. The bank can cancel your insurance each time you renew your mortgage.

  • If you renew your mortgage through a different bank or credit union to take advantage of a lower interest rate, you can’t take your bank mortgage insurance with you; you have to re-apply at an older more expensive age bracket, and of course still insurable.

  • Families get twice the coverage for the same price. That is, if you both die there are two policies that pay off towards your children’s benefit.

  • You own the Insurance Plan and retain control of it.

  • Your premium and coverage will not change for 10 years. The bank’s premium will change when you renew the mortgage – usually every one to five years.

  • If you have other insurance needs you can combine all your insurance needs and get a lower rate with your own plan, taking advantage of volume discounts as the cost per thousand dollar is lower with higher coverage amounts.
  • If you are insuring mortgages on rental properties, you can also get bulk rates, transfer coverage to new properties and eventually use the proceeds of the plan to pay capital gains taxes.
View Term Life Insurance Versus Bank Mortgage Insurance

Bank Mortgage Insurance

Term Life Insurance

  • When mortgages are renewed, you usually renew your insurance at the same time and if you have had a serious illness that would make you uninsurable, the bank will usually decline the mortgage insurance.
  • You own the policy and it is guaranteed renewable – usually to age 85 although it would be very expensive at older ages. If you have your health, you would purchase new insurance at the end of the term.
  • Bank Mortgage Insurance does not offer preferred rates for healthy people.
  • Healthy and fit? Save big with new preferred life insurance rates that can save 35% or more.
  • The bank’s mortgage insurance premium can change when you renew the mortgage – usually the term on a mortgage is 3 to 5 years although it could be amortized over 20 to 25 years. Ask to see the rate schedule – it will likely have different rates divided into 5 year age groups – e.g. 35-40; 40-45.
  • Premiums fully guaranteed. Personal policies have guaranteed rates. They will have premiums that stay the same for 10 years or whatever term you select 10, 15 or 20.
  • You have a separate policy for the mortgage and other policies for other life insurance needs.
  • You can combine all your insurance needs and get a lower rate with your own plan.
  • The bank controls the money and pays off the mortgage – it is a declining amount
  • You own the insurance and it is not tied to the mortgage lender. Complete freedom to change mortgage lenders.
  • If you renew your mortgage through a different bank or credit union to take advantage of a lower interest rate, you can’t take your bank mortgage insurance with you; you have to re-apply at an older more expensive age bracket.
  • Your beneficiary can take the money and keep the mortgage if it is to their advantage. If a couple owns the home, you get two separate policies which doubles the payment to the estate if both partners die. For example, if you have $250,000 of mortgage insurance, the amount declines as you pay down the mortgage. With your own policy, you would each have $250,000 for a total of $500,000 and it would not be decreasing.

Important Information for Canadian Seniors

If you are reasonably healthy why not get your own cheap life quote based on your health rather than a guaranteed permanent quote that assumes you are not healthy. For example, a typical $15,000 guaranteed permanent life insurance quote would be $255 per month for a 70 year old male if it is a guaranteed issue policy. On the other hand, a standard life quote for $25,000 (75% or more would qualify) would be only $99 per month for a healthy person.. By the way, if you are taking medication to control blood pressure or cholesterol levels and it is working you will likely qualify for standard issue. How many men or women at age 70 are not taking something?

Let our experienced agents go to work for you to get an inexpensive life insurance quote based on your personal health situation. We have access to dozens of companies who would like to provide an online quote for you. Let us help you get guaranteed life insurance quotes before you act on those cheap ones offered on the TV and newspapers.

Business Owners with Creditor or Loan Insurance

A recent business client was paying over $220 for life insurance of $150,000 on their business line of credit with three shareholders. They are now paying less than $100 per month for this policy. Do you have a line of credit where you are also paying for creditor protection coverage? Look at your bank credit card, line of credit or term loan contract or statement and then get a 10 year term quote and compare it for yourself. You work hard for your money so keep it for your savings or retirement account and not the bank’s.

Avoid the Bank Hassle – Get Term Life Insurance

When mortgages are renewed, you usually renew your insurance at the same time and if you have had a serious illness in that time, banks usually classify you uninsurable. The bank can then decline the mortgage insurance.

If you renew your mortgage through a different bank or credit union to take advantage of a lower interest rate, you cannot take your bank mortgage insurance with you; you have to re-apply at an older more expensive age bracket.

A bank’s mortgage premium can change when you renew the mortgage – usually the term on a mortgage is 3 to 5 years although it could be amortized over 25 to 30 years. Ask to see the rate schedule – it will likely have different rates divided into 5 year age groups – e.g. 35-40; 40-45. You’ll be surprised to find out the savings when compared to a 10 year term insurance quote from our website.

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All product names, trademarks, and trade names are the property of their respective owners. The Insurance Council (BC, AB, SK, MB), Financial Services Commission (ON), Chambre de la Sécurité Financière (QC), The Superintendent of Insurance (NB, NL, PE, NS) are the provincial and federal authorities that regulate, supervise and enforce standards for life insurance professionals.

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