Mortgage life insurance conventionally different from other life insurance policies offers a good deal of money mongers. This insurance is an optional service offered by a third party, in this case, policyholders ill or dies unexpectedly. Mortgage protection insurance covers the mortgage payments in the case the main income earner dies or becomes disabled. It is specifically designed with the option to opt-out or cancels the service at any time.
Mortgage life insurance has limitations, may not cover 100%. Mortgage loan insurance and mortgage life insurance are two different plans, we require mortgage life insurance if the down payment is less than 20% of the purchase price of the home. Mortgage life insurance is provided by a large insurer like Retirement Shield Canada Insurance, which may also be sold separately as mortgage critical illness insurance or mortgage disability insurance. A mortgage is a long-term obligation to pay back the money, before finalizing the mortgage do consider one is single, married or living common law, and has dependents or not and finally to protect himself/herself or the whole family. This insurance is affected by age, health or any pre-existing medical conditions, the kind of job and payout plan policyholder choose. There are lots of factors to consider before signing into mortgage life insurance; a lump sum to the beneficiaries, pays off or reduces the outstanding principal owed on the mortgage and provides coverage on losing the job or become disabled or very ill. Mortgage life insurance could be good, while it covers all or a set percentage of the outstanding mortgage balance.
|Benefits||Mortgage life insurance is the one-size-fits-all coverage. Mortgage life insurance’s biggest benefit is a convenient option for financially protecting the home. It’s a more flexible and expanded pool of buyers with lower cash requirements. Mortgage life coverage also can supplement an individual life insurance policy. If the coverage will cancel within the first 30 days, the policyholder might refund any paid premiums. Typical mortgage insurance is only underwritten at the time of death. Mortgage life insurance provides a broader range of loan products.|
|Premiums||Premiums are taxed at a much lower rate. Policy terms don’t change and in most cases, it guarantees the policy premiums. Mortgage life insurance premiums are charged Provincial Sales Tax.|
|Beneficiary||At the death of the policyholders, all funds from the insurance coverage go directly to the beneficiary.|
Difference between Mortgage Life Insurance v/s Term Life Insurance
|Mortgage Life Insurance||Term Life Insurance|
|Premiums||Premiums generally remain the same for all, even though a policyholder owe less on the mortgage over time.||Premiums may be fixed or increase with age, depending on the policy, the age or medical history.|
|Beneficiary||With mortgage life insurance, the beneficiary is the bank, the mortgage lender receives the death benefit, not the family member.||You name the beneficiary typically family member who will receive the death benefit.|
|Coverage||The termination age is generally specified 70.||they can convert it as a permanent life policy at expiration.|
|Transferrable||It may cause rate changes.||It remains unchanged.|
|Portability||Mortgage life insurance will be used to pay off the remaining mortgage upon the death.||The beneficiary will get the full amount of the policy.|
|Disability Coverage||The mortgage life insurance offers optional disability insurance.||Disability insurance is not covered by a term life insurance plan.|
|Death Benefits||The amount of the death benefit is equal to the outstanding mortgage balance.||Policyholder choose the amount of death benefit and remains the same as long as the policy is in effect.|