Two of the most popular insurance plans people choose are term insurance and mortgage insurance. The first is the preferred choice for many because it protects family members financially with a lump sum benefit in case of the insured’s death, while the second type of insurance refers to the protection of the lender and the borrower, by paying off a mortgage loan if the insured passes away.



Today we’re just going to focus on the borrower though. Mortgage insurance is basically bought when you get your mortgage and what this product does is to protect your family in the event that you die before you manage to pay off the mortgage. Since there are very few people who have the money to buy a house outright, mortgages are very common and a large part of what Canadians pay as part of their overall expenses. The idea behind this insurance is to financially protect your family for the time when you are paying the mortgage, so that in case you die your dependents do not need to pay the outstanding debt or loan amount. The house is inherited by the dependents free and clear, and your family will not be burdened by future mortgage payments. The bank you’re getting the mortgage from will offer you mortgage insurance if you wish, but you can decline this option. You can also look for another insurance company to get mortgage insurance, or you can simply choose another insurance product, such as life or term insurance.



Normally, term insurance is an insurance product that is designed to offer financial backup for your dependents – your wife and children, most usually – in case you die within the time you are covered for. These plans can have guaranteed level premiums for several years or even decades, and the plan can remain in force until the term ends. Unlike the first type of insurance, for term insurance you will have to take a physical examination which will tell the insurance company if you are healthy. Mild health issues are not usually a problem, but significant health issues may impact on your approval, and may mean the payments for your coverage are higher than originally expected. In general, the idea is to have peace of mind in your life, and this is exactly what an insurance contract promises to do.



Some financial experts will tell you that it is better to get whole life insurance rather than for a shorter insurance period, simply because you get more certainty, but there are a few reasons why this insurance may not be the best solution. First, you will only have dependents in your care for a limited time, for example until they have finished college or university, so there’s no necessity to pay more to extend your insurance coverage for longer than this. Also, insurance for a limited period of time is less expensive than life insurance in general. Everyone could use the extra money saved by the lower premiums to make other investments, or to pay down any outstanding loans faster, or simply for their own comfort. The fact is that low-cost life insurance is much more attractive and popular, and is the best-selling type of coverage; just ask insurance agents.

Speak with insurance brokers to find cost effective and protective mortgage insurance http://www.termcanada.com/about/ and term insurance http://www.termcanada.com/about/ which will put your mind at peace.