Life insurance or mortgage life insurance?Are you a homeowner, or about to become one? Have you thought about whether you would be able to keep up with your mortgage payments in the event of your spouse’s death? Buying a home is a major investment, and it is important to protect it when the time comes to get or renew a mortgage.
Many buyers are unaware that there are two options available for insuring the mortgage on their property:
- Mortgage life insurance or
- Life insurance
Mortgage life insurance
|Coverage amount|| Covers only the balance of the mortgage (amount due to the lending institution at the time of death). |
As the mortgage balance declines, so does the coverage amount of insurance.
| Covers the total amount of insurance chosen when you took out the policy.|
This amount remains the same over time according to the term of the contract.
|Premium||As the mortgage balance and the amount of insurance decline, the premium remains the same.||As the mortgage balance declines, the amount of insurance and the premium remain the same.|
|Beneficiary (in the event of the policyholder’s death)||The beneficiary is the lending institution.|| The beneficiary (e.g., spouse, parent, child, co-owner) is designated by you, the policyholder, in a contract.|
The beneficiary is free to use the benefit according to his or her priorities.
|Change of lending institution||Normally, you must apply again for a new mortgage insurance contract.||You keep your existing insurance and do not have to re-establish proof of insurability.|
|Sale and repurchase of the property||You must apply again for a new mortgage insurance contract.||You keep your existing insurance and to not have to re-establish proof of insurability.|