When you want life insurance, you would get it from a good insurance broker Canada. Did you know that you can get insurance from a mortgage lender? This type of insurance is called mortgage life insurance and is linked to your home mortgage. When you buy a home, you need to pay the mortgage amount as per schedule. In case of your untimely demise, your family will have the burden of repaying the mortgage. Failing to do so can result in the loss of the house.

This is where mortgage life insurance can help. It is insurance that protects your life and will pay your mortgage debt in case you pass on. It is a term insurance policy whose term or tenure matches to that of your mortgage. If you have a mortgage of 20 years, then you can get a mortgage life insurance for 20 years. This ensures that your family members don’t have to worry about paying the mortgage in case you expire.

Understanding How Mortgage Life Insurance Works

Generally, people buy the decreasing insurance plan in mortgage insurance. In this plan, the policy amount reduces in line with the mortgage amount. Since the coverage is to repay the mortgage debt, the policy amount would reduce until it reaches zero. In the event of the death of the mortgage borrower, the insurance policy would cover the mortgage amount. The amount goes to the mortgage lender who mostly issues the policy.

The following are some benefits of getting mortgage life insurance:

• When you are the sole earner in your family, then repaying the mortgage is dependent on your income. If something happens to you, then your loved ones will not be able to pay the mortgage and may end up losing the home. Mortgage life insurance helps avoid this problem since they can continue staying in the home while the policy pays for the mortgage.

• There are no medical tests needed to take out a mortgage insurance policy. This is one of the main attractions of this policy.

• There are riders that would allow you to draw from the policy in case you suffer from a terminal illness. A rider also allows you to get back the premium.

The main disadvantage is that this policy is not flexible. The coverage amount is equal to your mortgage ensuring no additional coverage. The other needs of your family will not be taken care if something happens to you. It is also expensive compared to a regular term policy.

Should You Buy It?

While the concept of mortgage insurance is good, there are practical problems involved. There is no flexibility and the payout would go to your mortgage lender, which means your family needs are not taken care of. Instead, you can buy a term life insurance policy after consulting the best insurance broker in Canada. This is not only cheaper but is flexible. Your family members can choose how best to utilize the payout. If your concern about repaying mortgages is overwhelming, then you can consider a mortgage insurance as additional insurance to cover the mortgage.

Company Information:

Name: Best Insurance Online
Address: 6 Toronto St, Suite 850 Toronto, ON M5C 2C5
Website: https://bestinsuranceonline.ca/
Call us at +1-877-611-6722