PI Financial Services

Mortgage Insurance

 

When you purchase a home, you will be offered mortgage insurance through your financial institution. While mortgage insurance is an extremely important component of your risk protection program, the coverage offered by your financial institution may not be your best alternative. An individually owned life insurance policy holds many advantages over bank mortgage insurance, as outlined below:

Bank Mortgage Insurance Individual Life Insurance
Your insurance covers only your mortgage balance. You can choose from different types of insurance (i.e. term or permanent) with a death benefit to cover more than just your mortgage.
Even though your mortgage debt reduces over time, your premiums remain level. Your coverage amount does not decrease over time unless you choose to change it.
If you die, only the outstanding balance on your mortgage is paid off. If you die, the death benefit is paid to your beneficiary who can use it as they see fit, not just to pay off your mortgage.
The mortgage lender is automatically the beneficiary. You name the beneficiary.
If you take your mortgage to another company, you may lose your existing mortgage insurance and may be required to re-qualify for new mortgage insurance. If you take your mortgage to another company you keep your existing insurance, so you won't have to re-qualify.
You lose all your coverage when your mortgage is repaid, assumed or in default. As long as premiums are paid your coverage remains in place, even if your mortgage is repaid, assumed or in default.
You have no flexibility to change your coverage as your needs change. As you pay down your mortgage, you may want to use this insurance for your long-term estate planning needs. If you hold a Term plan, you can convert your coverage to a permanent plan without any additional underwriting.