Buying a home is a big, yet exciting, commitment. When you applied for your loan, you were more than likely offered mortgage life insurance to cover the mortgage in the case of death. This type of coverage would pay off your mortgage and therefore protect your family from the financial burden of paying off the mortgage themselves.
This sounds like the responsible thing to do. And in some cases, it is made even easier as you don't need a medical!
Although protecting your mortgage with insurance is the right thing to do, taking out Mortgage Insurance through your bank may not be in your best interest.And, while the idea of not having a medical may sound appealing, it does put your payout benefit at risk. Should the lender find that you had a preexisting condition at the time of the claim, they may choose not to pay out.
In addition to that, the Mortgage Insurance rates may change, the coverage of your insurance declines as your mortgage declines, and should you move your mortgage to another institution, you will lose your coverage.
That doesn't sound like a good investment anymore, does it?
As an alternative, we can offer you Term Life Insurance. Term Life Insurance is often comparable in price (or less expensive) than Mortgage Insurance and it provides superior protection.
Unlike mortgage insurance taken out through your bank, you own the policy and it remains in place, even if your mortgage is in default. And best of all, with term life insurance, the benefit is paid to your beneficiary and not directly to the lender. So you family can choose whether to pay off the mortgage or perhaps use the money for something else that might be more important, such as your children's education.