Mortgage Life and Disability Insurance are the typical types of policies offered as optional insurance coverage. However, there are differences between the insurance policies offered by the lenders, mortgage brokers or life insurance agents.
The insurance offered by the lender is only valid while your mortgage is with that particular financial institution. The mortgage insurance offered by the lenders will only cover the amount of the existing mortgage at time of death.
Insurance offered through mortgage brokers is transferable to other financial institutions. This means you may switch financial institutions and your insurance policy will follow you. If your mortgage amount changes, you can even apply for a “top-up”. Mortgage insurance offered by mortgage brokers covers the amount of the existing mortgage at time of death.
A life insurance agent will offer term insurance which will cover a predetermined amount. The insurance payout is not linked to the mortgage. It would be the beneficiary’s decision as to whether or not he/she chooses to payout the mortgage.
Do not feel pressured to sign anything that catches you off guard. It is your financial future and your responsibility. If you would like to discuss your mortgage insurance options, give me a call at 204-371-9284.
