Mortgage Insurance in Canada

mortgage insurance cartoon

Mortgage Life Insurance in Canada is often misunderstood. Most mortgage insurance policies are sold through lending institutions and the insured often pays little attention to the details as he or she is focusing on their mortgage.  

Mortgage Insurance through a lending institution is essentially, decreasing Term Life insurance.  In other words, the value of the life insurance decreases as the insured’s mortgages decreases, but in most instances, the rates go up based on five-year spans. 

A more effective and cost effective alternative to mortgage life insurance, through a lending institution, is individual life insurance.

Individual life insurance can be tailored to the amount of your mortgage, or the insured can combine their life insurance needs with their debt protection needs.  The latter approach generally makes more sense – as it provides a more complete insurance solution.  Individual life insurance for a mortgage, can either be Term or Permanent insurance.  Term insurance policies are  fixed for a  stated term, such as a 10, 20, or 30-year term. Whereas,  a Permanent policy can provide level premiums for the insured’s lifetime. Permanent policies can also build a cash value and can be paid up in a limited number of years. 

Additional benefits of individual life insurance coverage versus mortgage life insurance:

  • The coverage is portable – if you move homes or switch to another bank.

  • The insured chooses the beneficiary, rather than the bank.

  • The individual plan pays out double in the event both spouses die.

  • One can combine Term and Permanent insurance needs under one plan.

  • Coverage can be maintained even after your mortgage is paid-off.

For more details, please visit our Instant Quote Page or contact us at 1-866-899-4849


Most recent articles

Your email address will not be published. Required fields are marked *