Is your mortgage protected in the event of your premature death? Mortgage life insurance offers some comfort that the outstanding mortgage balance will be paid in the event that the mortgagor (the person who took out the mortgage) passes away for the family. The beneficiary of this policy is actually the bank that lends the money, allowing for its complete pay off. Most banks and other lending institutions offer this product as part of their mortgage lending. If you opt to take out a mortgage insurance policy, be sure that you properly understand the ins and outs before signing on the bottom line so that you and your family are ensured proper protection.
These types of insurance premiums are included in the mortgage payments and will thus be adjusted accordingly. Should the insured die, the bank offering the cover will then pay off the mortgage (up to a certain limit in some cases, like $750,000 for one Canadian life insurance company). The premiums are determined by the applicant's age at the time of application and remain unchanged throughout the mortgage period.
As the insured pays the premiums, the financial risk reduces. When the mortgage is finally fully repaid, there is no risk and the insurance coverage will lapse. Mortgage life insurance surely has its critics, but it also has many supporters.
Premiums for mortgage insurance tend to be higher than for other insurance policies like life insurance. Some offerings by Canada's 4 largest mortgage insurance plans lends some credence to this widely help view; Their monthly premiums range between $75 to 80 whereas a personal life insurance policy would cost about $49.
Usually, it is the lenders that insist that the mortgagor takes out the mortgage insurance policy, and for obvious reasons. It's perfectly understandable, and if it is done correctly shouldn't cause much worry to the insured. In some instances, it makes sense to take out a joint policy, paying upon the first partner's or spouse's death. There are no guarantees however a joint policy will end up cheaper, it all depends on the terms of each policy, so it pays to do some shopping for the best deals.
In certain instances it might actually be unwise not to take out mortgage insurance, like where you have dependents and the mortgage balance is still high. Through this policy, you turn the family's biggest debt item in to a formidable asset. And like we have seen above, the rates are far from crippling. The financial pressure that your family may undergo in the unfortunate event of your demise is just too great and it's just not worth it.
No matter what you decide, it is recommended to protect your financial investment and your loved ones until your mortgage is paid off. This type of insurance is a simple and viable option to accomplish this goal.
These types of insurance premiums are included in the mortgage payments and will thus be adjusted accordingly. Should the insured die, the bank offering the cover will then pay off the mortgage (up to a certain limit in some cases, like $750,000 for one Canadian life insurance company). The premiums are determined by the applicant's age at the time of application and remain unchanged throughout the mortgage period.
As the insured pays the premiums, the financial risk reduces. When the mortgage is finally fully repaid, there is no risk and the insurance coverage will lapse. Mortgage life insurance surely has its critics, but it also has many supporters.
Premiums for mortgage insurance tend to be higher than for other insurance policies like life insurance. Some offerings by Canada's 4 largest mortgage insurance plans lends some credence to this widely help view; Their monthly premiums range between $75 to 80 whereas a personal life insurance policy would cost about $49.
Usually, it is the lenders that insist that the mortgagor takes out the mortgage insurance policy, and for obvious reasons. It's perfectly understandable, and if it is done correctly shouldn't cause much worry to the insured. In some instances, it makes sense to take out a joint policy, paying upon the first partner's or spouse's death. There are no guarantees however a joint policy will end up cheaper, it all depends on the terms of each policy, so it pays to do some shopping for the best deals.
In certain instances it might actually be unwise not to take out mortgage insurance, like where you have dependents and the mortgage balance is still high. Through this policy, you turn the family's biggest debt item in to a formidable asset. And like we have seen above, the rates are far from crippling. The financial pressure that your family may undergo in the unfortunate event of your demise is just too great and it's just not worth it.
No matter what you decide, it is recommended to protect your financial investment and your loved ones until your mortgage is paid off. This type of insurance is a simple and viable option to accomplish this goal.
