Protect your home and your family
Most lending institutions offer some form of mortgage protection, but look carefully at what you are purchasing as you may be locking yourself into something that does more to protect your lender than yourself.
Mortgage Life Insurance offered by most lending institutions
Generally, mortgage life insurance from financial institutions is non-convertible term insurance with no flexibility within the insurance contract. In the event you move your mortgage to another financial institution, you have to re-qualify for insurance which may be difficult if you’ve had a change of health.
Insuring your biggest asset
A personal life insurance policy doesn’t insure your mortgage. It insures you. Considering it is your income that makes the mortgage payments, pays all of your personal expenses, and puts money aside for retirement, the biggest risk your family will ever face when dealing with an untimely death or disability is a loss of income.
Personal Life Insurance
You select the plan which meets your needs. Most term plans offer convertibility features in the event your health changes and find it difficult to qualify for insurance. In this situation you can keep your insurance intact and there are no further health questions to answer.
Most mortgage insurance plans cover the exact amount of your mortgage. Each time you make a mortgage payment your coverage decreases, with no decrease in your premium, and once the mortgage is paid off your coverage ends. In the event of a claim the insurance proceeds automatically pay off the mortgage.
Since most mortgage insurance plans offered by financial institutions are underwritten at the time of claim there is no guarantee the insurance will ever pay out.
Your coverage remains level for the duration of the mortgage. In the event you decide to reduce your insurance, your payments will also go down accordingly. In the event of a claim your beneficiary will decide how to use the funds, which might be paying down the mortgage or taking care of more immediate needs.
All of the underwriting is done at the time of application and the parameters are clearly outlined within the insurance policy regarding claims.