What Is the Best Way to Insure the Mortgage on Your Mississauga Home?
You have two options when it comes to insuring the mortgage you have on your Mississauga home. You can either purchase the insurance through an insurance broker or get it through a bank. Before making a decision about the insurance you purchase though, take a look through the following information. There are certain factors that you should be aware of before committing to an insurance policy.
Term life insurance
When you purchase term life insurance through an insurance broker your death benefit will remain the same as you are paying off your mortgage. With mortgage insurance, paid to the bank, this death benefit will go down at the same rate that your mortgage does. Term life insurance will pay the mortgage off and any beneficiary can be designated to the policy. With this type of insurance there can be extra proceeds from it that will be paid directly to the beneficiary while with standard mortgage insurance there won't be any extra left over.
The cost of the policies
It's difficult to compare the cost of term life policies to mortgage insurance because there are so many variables involved. The only thing that can really be compared as far as cost goes is the length of time that you'll be paying the same amount for the policy. With term life insurance the cost will remain the same for as long as the term lasts. If it lasts for example, 20 years, then it will go up in price after that. If you have a 25 year mortgage and purchase mortgage insurance, the price you pay for it will remain constant for the entire 25 years.
One other thing to consider is that the mortgage insurance you purchase through a bank will be directly attached to your mortgage. If you ever decide to shift the mortgage to another financial institution you'll have to reapply for new insurance. With a term life policy you'll continue to be covered no matter who the home loan lender is.
Make sure that you compare both of the mortgage insurance types thoroughly before making a final decision on anything. The mortgage on your Mississauga home is going to be one of the biggest financial commitments you ever make in your life and you’ll want to be sure that it's insured the best way possible.