Buying your Mortgage Protection
How life insurance can help
| From some creditors | From Insurance Carriers | |
| Ownership Whos owns the insurance? | Typically owned by the lender. The lender may control what happens to your coverage. | Owned by you. You can control what happens to your life insurance coverage. |
| Beneficiary Who determines who will get the benefits? | The lender is often the beneficiary. You may have no choice in how the proceeds are spent. The lender receiving the proceeds, generally applies it to pay off the mortgage. | You decide who will be named beneficiary and receive the proceeds. |
| Renewability Can my coverage be canceled by someone other than myself? | Your policy may be canceled by the lender or issuing company. Often, coverage ends with the expiry/cancellation of the mortgage. | No. Although your coverage offers mortgage protection it is not tied to a specific mortgage or need. When your mortgage is finished your coverage may remain in force, except in the event of non-payment of your life insurance premiums. |
| Portability Can I continue the coverage if I change companies or move? | Your insurance may end when the mortgage is repaid, assumed, canceled, the house is sold or the group policy terminates. | Yes. Coverage is portable and you can use it to cover another mortgage, if desired. |
| Benefit amount Is the benefit amount level? | Benefit typically declines in line with the outstanding mortgage balance, if it is decreasing term insurance. | Yes. Amount of benefit can remain level even though the mortgage balance reduces. |
| Can I apply for more coverage than the mortgage amount? | Amount of benefit may only be for the amount of the mortgage, and there are limited options if your health changes. | Yes. Coverage can be higher than the amount of the mortgage to cover other needs. |
| Cash accumulation features Can the plan be designed to build cash values? | These plans are typically group decreasing term only. | Yes. Depending on the life insurance coverage you choose you may be able to take advantage of tax-deferred cash accumulation options. |
| Customization Can my plan be customized to meet my individual needs? | Your plan is often mortgage specific and may not be customized to fit individual financial protection needs. | Yes. Other benefits and features can often be added through optional riders. |