Mortgage Life Insurance vs. Personal Life Insurance

The Choice is Yours:


Mortgage Life Insurance

• The mortgagor owns your policy

• The insurance amount can only be the exact amount of your mortgage

• The mortgagor is the beneficiary

• Outstanding balance of the mortgage is paid upon death of insured

• Coverage reduces as the mortgage balance reduces but premiums are level

• You may need to requalify if your mortgage is refinanced or transferred – rate based on current age

• Coverage terminates when your mortgage is paid off

• Coverage is not portable if you change lenders. Submit new application based on current health and rates.

• Coverage is not convertible to permanent insurance

• If both insureds die together, only the mortgage balance is paid

• Generally, no distinction is made between smokers and non-smokers



Personal Life Insurance

• You own your policy

• You may select any insurance amount

• You name the beneficiary

• Proceeds are paid to the beneficiary upon death of insured

• Coverage may be maintained at original amount or reduced as you choose

• You may never have to re-qualify

• Coverage remains in place once your mortgage is paid off

• Coverage is portable if you change lenders – no need to re-apply to prove your insurability. You are protected from the risk of losing your insurance because of change in health

• If both insureds die together, both policies are paid (double coverage )

• Your rates will be based on your smoking status


information provided by: Cary Leung BA B.ED