Bank Issued vs Personal Mortgage Insurance
If you have a mortgage on your house you really should have mortgage insurance. The usual source for this type of insurance is the bank lending you the money to purchase your home. But there is an alternative to banks – personal mortgage insurance.
Bank Issued Insurance
When you get your mortgage from a bank:
- The lender is the sole beneficiary
- The death benefit decreases over time but the premiums do not always decrease
- If you switch lenders, you will need to re-apply for mortgage insurance in which case:
- You may have to pay more because you are older
- You may no longer qualify for coverage
Personal Mortgage Insurance
But when you get personal mortgage insurance:
- You are in control of your coverage
- You determine the beneficiary(ies)
- You decide the amount of the death benefit (the beneficiary receives 100% of this tax-free)
- You can cancel or alter your coverage anytime
- And if you switch lenders:
- You don’t need to re-apply for coverage
- And there is no risk you will not qualify for coverage
Consider this comparison chart:
|Benefit||Personal Mortgage Insurance||Bank Issued Mortgage Insurance|
|You own the policy||Yes||No|
|You choose the beneficiary||Yes||No|
|Insure any amount*||Yes||No|
|Coverage is portable||Yes||No|
|Customize your coverage||Yes||No|
|Plus, personal mortgage insurance can often be less expensive|
* Financial needs analysis is needed to determine the amount.
Want to know more and get this type of mortgage insurance? Just contact Jacqui and she’ll get you set up.
Personal mortgage insurance is provided by The Canada Protection Plan and is underwritten by Foresters Life Insurance Company.