Bank Mortgage Insurance
The Pros:
It's simple to implement.
Price is competitive for younger applicants.
The Cons:
Only pays declining balance of mortgage, yet premiums remain level. No sales tax payable.
Not portable. If you change banks, you may lose your coverage.
8% sales tax is added.
You can purchase term life insurance that is convertible to a guaranteed, permanent plan, without a medical examination. This is ideal if no other insurance plan has been implemented and you face a medical impairment in the future.
Coverage ends upon refinancing. You can elect a beneficiary for the cash proceeds payable upon death.
Coverage ends if mortgage is transferred.
Coverage can extend to beyond age 70 depending on the insurance company.
Coverage ends when mortgage is paid in full. The policy will pay even if the mortgage is paid off.
Not convertible. If you ever become unisurable due to health problems, you have no other options. Separate policies can be purchased, allowing more flexibility for couples.
Limited to joint first-to-die coverage only for couples.
Must be on title of mortgage to qualify.
Death benefit is paid to the bank. You cannot elect a beneficiary.
Term Life Insurance
The Pros:
Competitive pricing.
Level protection. Your coverage does not decrease over time with your mortgage.
Fully portable. If you switch banks or move, you are still covered.
No sales tax payable.
You can purchase term life insurance that is convertible to a guaranteed, permanent plan, without a medical examination. This is ideal if no other insurance plan has been implemented and you face a medical impairment in the future.
You can elect a beneficiary for the cash proceeds payable upon death.
Coverage can extend to beyond age 70 depending on the insurance company.
The policy will pay even if the mortgage is paid off.
Separate policies can be purchased, allowing more flexibility for couples.
The Cons:
The fact that we've listed no cons here probably has you questioning term life. Contact us - we'll be glad to answer all of your questions.
