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This is James. He recently renewed his mortgage with his bank. Like you, James has a number of reasons to make sure that his family is protected with mortgage life insurance. He recently heard that bank mortgage insurance may not be a good business, so he decided to do some research.
One of the biggest differences between private mortgage life insurance and mortgage insurance issued by a bank is the price. The insurance issued by the bank is almost always much more expensive than the private property insurance. And they do not offer discounts for non-smokers.
Another difference is that the value of the bank's mortgage life insurance benefit decreases as you pay off your mortgage. So, while continuing to pay the same price for insurance, it is actually worth less. Traditional term policies maintain their value and generally do so with lower premiums.
With mortgage life insurance, the beneficiary is the bank; With personal life insurance, you can name your beneficiary.
The mortgage insurance of the bank can use "subscription after the claim". This means that they will only decide if you qualify after a claim is made, at which time they can decide that they never qualified and end up paying nothing to their family.
The high-price bank insurance also increases every 5 years at the time of the renewal of a mortgage. Which means that the already high cost will continue to be even more expensive. James has tended to think that he will save 74% on his premiums, and with a quick phone call he has already taken the step to save money and ensure that his family is protected.
It's really that simple.
Video credits to Insurance Life Canada YouTube channel