Don't wait for a life insurance quote. Use our easy quote tool
Get a Life Insurance Quote from AMC Insurance
In the unfortunate event you should become seriously ill or pass away, you’ll want to ensure that your family can financially support themselves. Life insurance aims to provide just this. While it is a policy that can be provided through work or as “Mortgage Insurance” through the bank, neither option is necessarily the best for you or your family.
That’s why it is seriously worth considering taking out a Life Insurance policy yourself. You’ll have a better understanding of what it will offer your family should you become ill or pass away, and you will ultimately have greater control over the policy throughout your life. Most importantly, it can help you avoid leaving any debt behind.
Life Insurance offered by insurance companies is not the same as the Mortgage Insurance that can be offered by banks or credit unions. Check out the differences below and see how you can benefit from Life Insurance over Mortgage Insurance.
Life Insurance Company
- Protects your family
- Controlled by you
- Fully portable – transferable to any house
- Flexible – upon death, your family has the option of paying off the mortgage or investing the funds
- Allows shopping for better interest rates when mortgage renews
- Choice of life insurance plans and benefits
- Choice of amount of life insurance coverage and face amount does not decrease as the mortgage is reduced
- Coverage is convertible and renewable
- Expert advice – You deal with a professional insurance adviser about life insurance and all insurance coverage can be through one broker
Bank (Mortgage Insurance)
- Protects the bank
- Controlled by the bank
- Runs out when house is sold or traded
- Inflexible – the mortgage must be paid off regardless of interest rates and other investment opportunities
- No shopping – unless you are willing to pay higher premium and are insurable
- Limited choices
- Coverage must be equal to the mortgage amount and decreases as the mortgage is reduced (the premium does not!)
- A missed mortgage payment often means lost coverage
- You deal with a banker about insurance matters and the insurance coverage is spread all over
Mortgage Insurance: Not Always a Sure Thing
For Canadians who have a mortgage that’s covered more than 80% of the initial cost of their home, their mortgage lender will require them to have Mortgage Insurance – commonly known as Mortgage Default/CMHC Insurance.
While this policy is designed to provide financial protection in the event of the borrower (home owner) defaulting on their mortgage repayments, this protection is designed for the mortgage lender – not the mortgage borrower.
In a situation where you become seriously ill or pass away and the repayment responsibilities are passed onto your spouse or relatives, Mortgage Insurance typically has only one outcome: if your spouse/relatives cannot afford the repayments, the mortgage lender will make a claim under Mortgage Insurance and receive the money that was still owing from you.
Life Insurance: Accounting for Your Debt and Your Family
Life Insurance, however, provides you with options. If you pass away or are ill to the point you can no longer work, you may be able to claim your policy to receive finances for the following:
- to pay off your mortgage;
- to pay off other loans;
- as money for your family and loved ones to use at their discretion; or
- for all of the above
What Life Insurance offers is choice – clear, tangible choice. Mortgage Insurance, on the other hand, serves a singular purpose – and it’s to protect your mortgage lender (be it a bank or a private lender). Ultimately, Life Insurance exists to give you a way to guarantee your loved ones are financially protected after you’re gone.
To find out more about Life Insurance or to get a quote, contact AMC Insurance today.
In the world of insurance, finding an affordable insurance provider which also offers good coverage is not an easy task. If you are looking for home insurance, car insurance, life insurance or health insurance, we have the information you need to help you make the right choice.