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Mortgage Life Insurance Protection

Mortgage InsuranceWhat Your Bank Is Not Telling You About Your Mortgage Insurance

Would it surprise you to find out that your bank is ripping you off on the mortgage life insurance you bought from them? It sure surprised me. One day I received a phone call from a potential client looking to buy mortgage insurance through me. This potential client turned out to be a bank manager!

I was stunned. I paused for a second and then asked, “Doesn’t the bank you work for offer mortgage insurance?”
“Yes,” replied the bank manager, “but...

  • The prices offered by banks are way too high for what you get.
  • Why should the cost of my insurance increase after my term, while my coverage decreases?
  • Why should the bank own and control my contract when I can?
  • Why should the bank be able to cancel the insurance on me if they want?
  • Why does the bank get to decide who gets the insurance money?
  • Why can’t I keep my insurance protection if I change homes or banks?
  • Why doesn’t the bank give me an insurance contract or policy describing the details?”

“Is that all?” I asked.
“No,” replied the bank manager.

“The fact is that banks are not insuring you; instead they are acting like sales agents earning a commission from the insurance company. You meet with bank employees that have quotas to fill when it comes to mortgage insurance, which is why they pressure clients into buying from them. You are not obliged to buy mortgage insurance from your bank, and people who have can cancel at any time with no penalty.”

After reading the details of my telephone conversation, I want you to answer the following question: If the mortgage insurance offered by your bank is not good enough for the bank manager, why should it be good enough for you?

Protecting Your Home and Family with an Individual Term Life Insurance Plan

Most lending institutions offer mortgage life insurance as part of their mortgage packaging. But look carefully before you sign on the dotted line. You could find yourself locked into insurance that does more to protect your lender than you.

You’ve worked hard to find just the right home and the right mortgage. Shouldn’t you take the time to find just the right mortgage life insurance protection for you and your family?

Mortgage Insurance is a fundamental financial planning concept that provides:

  • Life insurance protection
  • Funds to pay down your mortgage in the event of your death
  • Flexibility if you change lending institutions
  • Ability to change your policy as your needs change
  • A death benefit that is paid to your family, not the lending institution

Mortgage Insurance is ideal for you if:

  • You have a need for life insurance protection for your mortgage
  • You want the flexibility to change lending institutions to take advantage of mortgage interest rate promotions
  • You plan on changing your residence in the next 20 years
  • You want your family, not the lending institution, to have control over the death benefit

Individual Term Mortgage Insurance vs. Mortgage Insurance from Your Lender

Mortgage life insurance offered by most lending institutions   With personal life insurance
It’s about having control.
Your lender owns the policy and if you find a better mortgage rate at another lending institution, you may have to re-qualify medically for the life insurance protection. Usually, your mortgage life insurance cannot be moved to another institution.

Your lender automatically pays off the mortgage if you die. Your beneficiary has no choice about how to use funds, at a time when funds may be required the most. You have a lending institution employee to look after you.
  You own the policy, not your lender. You have the freedom to switch your mortgage to another lending institution without jeopardizing your life insurance coverage.

Your beneficiaries can choose how to use the funds – to pay off the mortgage, provide a monthly income or take care of a more immediate need. It’s their choice, not your lenders’. You use your own insurance and financial advisor to arrange and service the policy.
It’s about getting the most for your money.
The cost per thousand of coverage generally increases every year. When you think about it, costs may increase while coverage decreases.

The insurance protection stops when the property is sold.
  You choose the type of insurance that best suits your needs with premiums to suit your budget. We offer a range of term and permanent life insurance solutions. You can choose a plan that will keep the premium you pay level for 10, 20 years or for your lifetime. The insurance protection stays in place even if the property is sold.
It’s about being covered.
Generally, mortgage life insurance from most lending institutions is non-convertible term insurance – there are no cash values, no premium flexibility or ability to move to a permanent life insurance policy if your needs change.

Usually covers the exact amount of your mortgage. And your coverage decreases as the mortgage is paid down. This means you have no coverage when the mortgage is paid off.
  Our convertible term life insurance products are fully convertible to permanent policies so if your health changes and you find it difficult to get life insurance, you can keep the full death benefit and convert your insurance to the permanent insurance policies available at the time without having to re-qualify medically.

Your coverage doesn’t decrease as the mortgage is paid down. This means additional funds could be available at a time when your family may need it the most. Or you could reduce the face amount when you want.

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