- November 23, 2016
- Posted by: admin
Assuming you use a mortgage to finance your home, it just makes good sense to ensure your investment is adequately protected through an insurance plan – one that will pay off your mortgage should anything happen to you.
But, there is more than one option for insuring your mortgage. Many people are unaware that their lending institution is not the only source for this kind of protection and that better choices may exist. Choices with lower cost and greater flexibility. So, it makes sense to do some shopping and comparing.
Your mortgage lender will usually offer you mortgage insurance to cover the balance owing, if you should die before the mortgage is paid off. But you may also choose to buy insurance directly from your independent life insurance adviser instead. This is often a less costly option and offers much more flexibility.
Your mortgage lender’s joint coverage is very different from the joint coverage you buy directly from an insurance company. With the lender’s coverage, the death benefit is paid directly to the lender on the first death and the coverage ends.
Is mortgage insurance the same as an ‘Insured-Mortgage’? No. Mortgage insurance on your life is not the same as an “insured mortgage.” An insured mortgage protects the mortgage lender in case you do not make your mortgage payments. This coverage is provided by CMHC – Canada Mortgage and Housing Corporation – and is required if you have a “high-ratio” mortgage. (A mortgage is high-ratio if the amount borrowed is more than 75% of the purchase price or the appraised value of your home, whichever is less.) Contact us, we believe we can cater to your needs in an effective and ethical manner.