April 19, 2023

8 Reasons To Purchase Your Mortgage Coverage From A Life Insurance Advisor

Chris Lubell


Mortgage life insurance offered by the lender is typically more expensive than term life insurance offered by a competitive life insurance provider. Particularly if you are eligible for non-smoker rates, this is true.


The mortgage insurance provided by the lenders might not be available to you if you have certain health concerns. This might not be the case with term life insurance because it is easier to obtain poor insurance and competitive underwriting.

Reduced Coverage

Be advised that as the mortgage is paid down, the death benefit of creditor/mortgage insurance decreases. The amount of the coverage's premium or cost has not changed in the interim.
The death benefit of term life insurance does not decrease over time. You select the level of coverage you desire. As a result, you have the freedom to lower your coverage and premium when the time is perfect for you. Keep it if you have it in case you need it again or if you ever lose insurance.


Because term life insurance is not mortgage-related, you have the freedom to move it from one property to another without having to requalify and maybe pay higher premiums.


With term life insurance, you may secure your family's financial needs and other responsibilities while only paying one cost-effective payment. This is different from creditor/mortgage insurance, which can only cover the mortgage debt.
Creditor/mortgage insurance will no longer provide you with protection when you pay off your mortgage, but term life insurance might. You can also switch your term life insurance into permanent coverage without a medical exam, unlike mortgage insurance.
The death benefit is managed by the beneficiary.
There is no choice as to what happens to the money when you pass away with creditor/mortgage insurance. Your mortgage is simply paid off with the funds, and the insurance policy is cancelled.
Your beneficiary chooses how to use the insurance proceeds from term life insurance. For instance, investing the insurance funds rather than paying off the mortgage right away can be advantageous if the mortgage has a very low interest rate relative to the yields on accessible fixed income investments.

Can your assertion be refuted?

When a death claim is lodged, the creditor/mortgage insurance coverage is frequently examined. Mortgage/creditor insurance permits the denial of a claim in some circumstances even after the policy has been in force for longer than two years.
After two years, term life insurance is considered final, barring fraud.


A skilled insurance advisor who can implement your life insurance coverage in accordance with your overall requirements is the finest source of advice on the most appropriate approach to organise your life insurance. Your bank or mortgage broker can offer you advice on the best arrangement to fund your mortgage.

The largest debt (and asset) you will likely ever incur is your mortgage. The wisest thing you can do for your family is to make sure your mortgage doesn't outlive you.
If you believe it's time to review your current insurance coverage, get in touch with me. As always, don't hesitate to forward this information to anyone you believe would be interested in it.

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