If we conducted a survey on the insurance industry, you would probably be surprised to find that many of your fellow citizens have no idea how much life insurance and disability insurance may cost on their mortgage, and maybe you don’t know it yourself.
Nothing surprising in there by the way, since these costs are added as a percentage!
And this way of doing financial institutions obviously has its share of repercussions, causes serious and numerous impacts such as:
- The cost, first and foremost, mortgage insurance costs significantly more than personal life insurance
- General rule, the cost of mortgage insurance increases over time
- Considering your entire loan, his interest rate will be increased
- Part of your payment is allocated to the cost of insurance (rather than the total amount of your bi-weekly – or monthly payment)
- Life insurance decreases with the loan
- Life and disability insurance contracts do not belong to you, since it is the financial institution that is both owner and beneficiary
- With a personal contract, either for life insurance or for disability insurance, you choose the amount according to your real need. You are not required to insure the full amount of your mortgage just as you can purchase an amount greater than the outstanding balance of your mortgage
- Regarding disability insurance: according to your needs, coverage can also cover payments of all forms of debt, such as line of credit, credit card, personal loan, car loan or rental, residential lease, etc.
- You can choose the desired monthly amount to cover all the debts or just a part.
- It is financially preferable that you do not change financial institution along the way (for your loan), since you would then have to provide a new check-up while having to pay the costs related to your age
- In this case it is not a contract, we generally speak of a simple “member guide”
- In the event of a claim, your state of health will be thoroughly reviewed
Now aware of the many ins and outs of mortgage insurance, what to do?
It is desirable, and above all recommended, to take out protection that you own while naming the beneficiaries of your choice, and this at a much lower cost.
For example: is it better to take out diminishing life insurance with the loan, or to take out fixed life insurance that is not linked with the said loan? Insurance with which beneficiaries could keep the amount of insurance while paying off the rest of the mortgage, at a lower cost than insurance offered by the credit union or bank?
We obviously answer thatit is better to opt for a personal contract, idem with regard to invalidity insurance: is it preferable to subscribe to the invalidity insurance offered by the fund or the bank (and which covers the payment, but only in the event of invalidity), or to subscribe a personal contract covering all of your debts (personal loan, mortgage loan, car loan and rental, credit cards, rental lease, etc.)?
The answer is the same: strongly a personal contract!
To sum up, let’s say it’s important to remember thatit is far better to take out personal insurance rather than go with that of the financial institution that grants you the loan. It suffices, moreover, to think about it for a moment to quickly realize that if the caisses and the banks are without a shadow of a doubt past masters in the art of lending, life insurance companies, for their part, remain the only true specialists in personal insurance products.
Questions? Or maybe you want more information? Well don’t hesitate and call us by dialing 1 844 285-5007, and our team members will make sure to answer them.
For twenty years already, SoumissionAssuranceVie.ca acts as a premium comparator and has thus helped hundreds of thousands of Canadians find the best possible insurance coverage.t, at the best prices!
And you, what are you waiting for to save?
When you offer to put everything in your loan payment or to include insurance you can mention: I don’t want your candy!