Mortgage insurance is life insurance that pays off your mortgage in the event of your death. It’s not just a piece of paper, though. It’s an investment in peace of mind. You can rest easy knowing that your family will never lose its home, even if the unthinkable should occur.

This type of insurance is offered by most banks and lending institutions.  However, when you are purchasing your new home, take the time to shop around for life insurance. Compare the cost of a term life insurance policy offered by insurance companies to a mortgage insurance policy offered by banks. Chances are you'll find a term life insurance policy will have lower yearly premiums and offer more coverage and flexibility than a bank mortgage insurance policy.

COMPARE THE DIFFERENCE IN CONDITIONS:

Bank's Mortgage Insurance	Term Life Mortgage Insurance
No discounts on premiums for healthy people.	Discounts on your premium if you are a healthy person with a healthy family history - (Very significant savings for older people.)
The older you are the more expensive premiums are - in comparison to a personal policy.	Over 15 companies competing for your business - get the best rates available based on your health situation.
Group Policy - NO Control	YOU are in complete control
Policy is owned by bank	Policy is owned by YOU
Policy may be cancelled by bank	Policy can only be cancelled by YOU
NON transferable	Fully transferable
NOT convertible	Fully convertible (life portion)
Premiums NOT guaranteed	Premiums fully guaranteed
VOID if mortgage in default	Insured even if mortgage is in default
LAPSES if property is sold or if you move your mortgage to another bank	Portable - your insurance can move with you
NOT guaranteed renewable at mortgage renewal date	Automatically renewable to age 75

Depending on your age and health, the premiums on mortgage life insurance can be much higher than what you would pay for a term life insurance policy. Take a look at these comparisons for $250,000 coverage:

For a couple aged	Monthly bank mortgage insurance premiums*	Term 10 monthly life rates**
30	$36.00	$24.53
35	$52.00	$28.13
40	$80.00	$36.00
45	$116.00	$73.58
50	$160.00	$73.58

*Based on the information available in October 2007 from the websites of two major Canadian banks. **Based on the best rates available for joint coverage (male and female non-smokers) in October 2007 as defined by several insurance companies.

And finally:
While the monthly premium is generally locked in at the rate per $1000 according to the age of the older insured person, the amount of the payout shrinks as the mortgage is paid down.
What does this mean for you? The cost of mortgage insurance becomes very expensive as every week passes! The graph in figure 1.1 shows a $100,000 mortgage with an amortization period of 25 years, at an interest rate of 6.7%. The balance owing declines as illustrated.

Fig.1.1 Declining Balance versus Level Coverage

With our low-cost solution, upon death your beneficiary receives the full $100,000.

For more information - Contact us.