Of all different types of insurance, mortgage seems to be the one that comes with the most confusion. So what is mortgage insurance, and in what ways is it different than life insurance?
Mortgage insurance will financially cover your mortgage payments, or the balance of your mortgage (up to a certain amount) in the event that you become critically ill, or in the event of your death.
Mortgage insurance is different than life insurance because the money will go directly to your bank to pay off your mortgage. Your family will not receive the money in the same way they would your life insurance payout, but it will ensure your loved ones are not left struggling to make payments on your house.
Do you have to get mortgage insurance… when you get a mortgage?
Mortgage insurance is typically built in to many mortgage plans offered by your bank. Many people sign up for mortgage insurance in the midst of all the paperwork they are going through while getting a mortgage.
Some don’t realise they can chose to opt out, or that they don’t have to get mortgage insurance from the bank, and that they can get it with a third and independent provider, like Money Freedom.
According to Canada Mortgage and Housing Corporation, if you buy a home with a down payment of less than 20%, then you must get mortgage insurance. If you buy a home with a down payment above 20%, you can choose to get mortgage insurance or choose not to.
What are some of the benefits of mortgage insurance?
If you become sick before you get life insurance, than you may not qualify for it. Mortgage insurance can give you an alternative option to helping to take care of your family, knowing they won’t receive any life insurance after your passing.
If you are in a situation where you know your partner or family could not afford to make the mortgage payments without your income, they may be forced to sell the house and move, just to be able to pay off the mortgage. Knowing your family can stay in the family home and find some comfort in difficult times.
Another reason you may want to consider getting mortgage insurance, is if you want to double up on the types of insurance. Mortgage insurance would cover the mortgage, and life insurance would provide your family with some income to help keep them financially secure.
What are some of the benefits of getting a mortgage insurance with Money Freedom?
Getting a mortgage insurance policy through Money Freedom Inc. instead of a bank gives you, well, a little more freedom.
Changing mortgage lenders means re-applying, and possibly paying a higher premium. A mortgage insurance plan through Money Freedom gives you rates that stay constant, even if you change banks.
Money Freedom Inc. will pay out your family, instead of the bank, which gives your loved ones the option to decide what they want to do with the family home after your death.
And finally, Money Freedom gives you the option to shop for the best possible rates, whereas the insurance rates at banks tend to be higher.