Term Life Insurance Canada: Family Protection - Insuring Your Mortgage for Life or Disability. You never Know!
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Homeowner's insurance is usually fire or damage insurance to the majority of homeowner's. These are necessary policies, and usually you won't be able to get a mortgage unless you have them, but these policies do not protect the event that you will be unable to pay your mortgage because you cannot work.
This type of important insurance is known as mortgage life or mortgage disability insurance. It is more proballe that you will become disabled and not be able to pay your monthly mortgage than it is that your home will be consumed in a fire.
Lenders will usually offer a mortgage life policy when you sign up for a mortgage. But you can also contact your own or other insurance companies to find out about this kind of insurance. There are a number of reasons you should consider your own insurance policy rather than just take the one offered by your lender.
If you take the lender's policy, you will not have the same array of choices that you will have if you shop around with individual insurance companies. The lender's policy will be a standardized version, based on the outstanding amount of your home loan. You cannot alter it in any way to your own needs.
If you would like to have a policy for greater than the amount of the home loan, your bank will not offer this; they only cover the amount of the mortgage. You cannot change the amount of the standard policy or make any other changes to the policy.
This is one of the important reasons to shop for your own insurance: the amount of control you have over it. In addition to deciding the amount of the policy you want, you can decide to have the policy remain the same or go down over time. Most bank's policies are decreasing term. In the case of the lender's policy, the policy is usually paid down if the mortgage is paid off or the house is sold. You can carry the insurance from house to house when it is your own policy; the lender's policy is tied to the mortgage.
There is no convertibility factor in a lender's mortgage insurance policy, while an individual policy can be converted, and cash values will not accrue with group policies whereas an individual policy can provide a return of premiums over time.
A final warning is that banks are not in the business of insuring, they are in the business of making loans. As in most cases, you should work with an expert in the area and when it comes to insurance, the experts are the insurance agents.
This type of important insurance is known as mortgage life or mortgage disability insurance. It is more proballe that you will become disabled and not be able to pay your monthly mortgage than it is that your home will be consumed in a fire.
Lenders will usually offer a mortgage life policy when you sign up for a mortgage. But you can also contact your own or other insurance companies to find out about this kind of insurance. There are a number of reasons you should consider your own insurance policy rather than just take the one offered by your lender.
If you take the lender's policy, you will not have the same array of choices that you will have if you shop around with individual insurance companies. The lender's policy will be a standardized version, based on the outstanding amount of your home loan. You cannot alter it in any way to your own needs.
If you would like to have a policy for greater than the amount of the home loan, your bank will not offer this; they only cover the amount of the mortgage. You cannot change the amount of the standard policy or make any other changes to the policy.
This is one of the important reasons to shop for your own insurance: the amount of control you have over it. In addition to deciding the amount of the policy you want, you can decide to have the policy remain the same or go down over time. Most bank's policies are decreasing term. In the case of the lender's policy, the policy is usually paid down if the mortgage is paid off or the house is sold. You can carry the insurance from house to house when it is your own policy; the lender's policy is tied to the mortgage.
There is no convertibility factor in a lender's mortgage insurance policy, while an individual policy can be converted, and cash values will not accrue with group policies whereas an individual policy can provide a return of premiums over time.
A final warning is that banks are not in the business of insuring, they are in the business of making loans. As in most cases, you should work with an expert in the area and when it comes to insurance, the experts are the insurance agents.
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