Now is the time to think about replacing your Mortgage Insurance with something better!

10/05/2024 | Financial Planning

Whether you’re buying a new home or renewing your mortgage, you will want to protect yourself with insurance – either mortgage insurance or individual life insurance. But which is the better option?

Mortgage insurance might seem like the logical choice but it is not what we recommend to our clients. Did you know that individual life insurance could save you thousands of dollars, give you more flexibility and provide you with better coverage?

If you have already signed on for mortgage insurance (also referred to as creditor protection) it is not too late to switch. Our advisors will customize a plan that meets your needs. Individual life insurance can do much more than just cover the balance of your mortgage. It can cover you and your family by providing more and at a lower cost.

Individual life insurance is the far better option

Individual life insurance (Life Insurance) is not tied to just your mortgage. It is designed to provide your beneficiaries with money in the event of your death. Its flexibility allows your beneficiaries to use the money for whatever purpose they wish, which can include paying off the balance of your outstanding mortgage. The choice is theirs.

If this is not reason enough to opt for Individual life insurance over mortgage insurance, here are the nine reasons why CAPCORP recommends it:

  • Lower premiums— Life insurance carries lower premiums than mortgage insurance.
  • Your choice of beneficiary— Life insurance lets you choose the beneficiary. With mortgage insurance, your mortgage lender is always the beneficiary.
  • Advanced underwriting— Life insurance is underwritten at the time of application. Once life insurance has been approved, it’s extremely rare for a claim to be declined. Mortgage insurance is underwritten at the time of the claim, which increases the odds that a claim will be declined.
  • Consistent death benefit—The amount your beneficiary receives remains constant with life insurance. Mortgage insurance covers only what is left on your mortgage, so the amount it pays out decreases every time your mortgage balance goes down.
  • Greater independence— Life insurance is portable, even if you change your mortgage lender. Mortgage insurance is tied to your lender and will require you to reapply for coverage when renewing your mortgage.
  • Fewer exclusions— Life insurance only has 2 exclusions: death by suicide in the first two years of the policy and death by committing an act of crime. Mortgage insurance exclusions vary by lender and you need to confirm this information with them before you sign an agreement.
  • Greater coverage— Life insurance covers each individual for the selected amount of life insurance coverage. Mortgage insurance only covers the outstanding balance of the mortgage.
  • Highly qualified insurance advisors—A licensed insurance advisor provides professional advice in helping you select the right individual life insurance coverage for your needs. Mortgage insurance is provided by a lending agent, who is not a licensed insurance advisor.
  • Advantages for business owners—If you own a business, your company can pay your life insurance but it cannot pay for your mortgage life insurance.

If you’re buying a new home, we understand that it can be a busy and stressful time. Let us help you sort through the options and make the best investment in your family’s future. Please reach out to us : if you have any questions on a new policy or if you would like to discuss replacing your current mortgage insurance policy.


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