Stop! If you're considering mortgage life insurance, you need to be aware of what exactly this type of coverage is, it's deficiencies, and the alternatives.
First, a definition. Mortgage life insurance is group creditor protection that covers the amount of your mortgage. It is generally made available through the bank offering you the mortgage.
What's important about this is that 'group creditor protection' is a subset of life insurance policies — and it's certainly not the best coverage available if you are seeking to insure your mortgage. Instead you should be using Term Life Insurance to provide mortgage life insurance protection. Term Life insurance has far more features and less deficiencies than mortgage life insurance. Every Canadian consumer advocate that's ever commented on mortgage life insurance, has indicated that Canadians should use term life insurance for their mortgage rather than mortgage life insurance offered through their banks.
Why mortgage life insurance isn't recommended
So, what is true mortgage life insurance (group creditor protection) and why is it not recommended? Mortgage life insurance that's offered through your bank has a number of deficiencies. First, premiums are generally only level for the duration of your mortgage term — that could be only a few short years. Beyond that point, premiums are not guaranteed. The insurance is not portable (you need to reapply if you move banks) so you could end up unable to purchase mortgage life insurance in the future. And because of the way it is underwritten, by all accounts it has a higher probability of your claim being denied.
The term life alternative
By contrast, Term Life Insurance has premiums that are level and guaranteed for as long as the 'term', and you can select a term as long as 30 years (and sometimes longer). The insurance is portable — it doesn't matter where your mortgage is held. And it pays your beneficiaries not the bank. Overall term life insurance is far better coverage than bank mortgage life insurance… and it is often half the price!
Find out for yourself now — use the form at the bottom of this page to run a quote from 15 Canadian term life insurance companies and see how much you could be saving today, and have better coverage than offered from your bank.