What is mortgage insurance?
This insurance can cover your mortgage payments in case of death, invalidity or critical illness. It is a product often offered by your financial institution when financing your mortgage. Depending on the institution, this insurance can protect you against these three risks.
The lender may require that you purchase insurance (very rare), but they cannot force you to take out their policy. They must let you choose the insurer. In addition, it is important to know that the lender's insurance can be canceled at any time without penalty. And no, you do not have to wait for the renewal of your term to cancel it.
But do you really know what it means to take out mortgage insurance with your institution? After careful analysis, this kind of insurance product is certainly not your best option. In many cases, there are cheaper and more advantageous solutions available through a personal insurance contract.
What are the advantages of taking out a personal insurance contract?
You are the owner of your contract and not the financial institution:
- If you choose to change financial institution for your loan, you do not have to provide new evidence of insurability since your policy is not related to your mortgage. This allows you to keep your bargaining power in the event of a health concern that would render you uninsurable. You do not have to stay with your lender and you can always get the best mortgage rates. It's something to thinking about.
- Do you want to make a change to your insurance? It's possible! The mortgage insurance we offer has one important benefit: the flexibility to adjust the type and amount of your insurance, or even convert it into a permanent life insurance solution, without health proof!
You get fixed protection for the duration of the contract:
- Unlike financial institutions, your coverage does not decrease as you repay the balance of your mortgage. No matter the term of your mortgage, we can offer you a fixed insurance that will not decrease at the same time as your mortgage balance. The premium of your insurance contract is thus guaranteed for the duration chosen at the beginning (temporary, 10, 15, 20, 25, 30 years, etc.).
You determine the beneficiaries of your choice:
- For products offered by a financial institution, they are automatically the beneficiary. On the other hand, in a personal insurance contract, the beneficiaries you have chosen will be able to use the money from your insurance as they please, either to repay the balance of the mortgage, invest or finance a building renovation project or any other project important to you.
Personal insurance is less expensive:
- Mortgage insurance is a generally expensive and highly profitable product for financial institutions. This type of insurance does not distinguish between a healthy, non-smoking person and a smoker with less healthy habits.
- Individual insurance takes into account many of your personal criteria (gender, smoking, occupation, lifestyle, age, medical condition, history, etc.) so that people with a favorable condition have access to a much more affordable premium.
AccèsConseil can help you find the right solution for your needs
As personal advisors, we have your interests at heart and evaluate several insurance companies to find the offer best suited to your situation, your needs and budget. Contact us and see for yourself. Who knows, you might be pleasantly surprised.
PSSST. Are you still skeptical? Watch Pierre-Yves McSween's short video (in French) summarizing the benefits of taking out term insurance instead of your financial institution’s mortgage insurance.