Your mortgage is the single largest purchase you will likely make in your life. Therefore, insurance coverage is an important consideration! In addition to my mortgage brokering license, I also have a life insurance brokering license. You are not required by law to take life insurance on your mortgage but many times there is a practical side that begs the question “what happens if something happens?” Why wouldn’t you protect your largest investment? Most couples use two incomes to qualify -how do you afford your home if you are down to one income?

Did you know that 50% of Canadians buy bank creditor insurance despite it being a far inferior insurance product? Creditor insurance (often referred to as mortgage insurance and offered by many financial institutions) and life insurance are VERY different and here is the major reason why: PORTABILITY – even if you change mortgage lenders you still keep the same life insurance.  You don’t have to requalify in the event of a change. Some people get stuck paying high mortgage interest rates at their current lender because they can no longer qualify for insurance so they can’t break up with their bank. Don’t make this mistake and buy bad insurance.

Portability is very important but let’s not forget how important it is to be able to choose your beneficiary instead of creditor insurance defaulting and paying the bank. And, finally what you pay for is what you get. If you buy $500,000 worth of coverage your beneficiary gets paid $500,000. This is completely different than creditor insurance…your premiums are set on $500,000 but only the remaining mortgage balance gets paid (ex. $300,000) despite paying for it!

Remember life insurance is most cost-effective when you are young and healthy…it’s cheaper to buy 10 years too early than 1 minute too late! No insurance is the worst insurance!