Life insurance planning tips for homeowners

Quite simply, 10-year term insurance is a fundamentally superior option compared to bank mortgage insurance. Here are some reasons why 10-year term insurance is better and much cheaper than bank mortgage insurance:

  • If you are quick paying your mortgage, your bank insurance premium will be relatively high for a rapidly reducing amount of insurance. Individual insurance policies maintain the same coverage. You can reduce the coverage and cost at any time as your mortgage reduces.
  • If you have a low-interest rate on your mortgage, having the bank automatically pay off the mortgage may not be the best choice.

  • Once approved, the company can not cancel the life insurance if your health becomes a problem. The bank can cancel your insurance each time you renew your mortgage.

  • If you renew your mortgage through a different bank or credit union to take advantage of a lower interest rate, you can not take your bank mortgage insurance with you. You have to re-apply at an older, more expensive age bracket, and of course, still insurable.

  • Families get twice the coverage for the same price. That is, if you both die, two policies pay off towards your children’s benefit.

  • You own the Insurance Plan and retain control of it.

  • Your premium and coverage will not change for ten years. The bank’s premium will change when you renew the mortgage – usually every one to five years.

  • If you have other insurance needs, you can combine all your insurance needs and get a lower rate with one plan while taking advantage of discounts as the cost per thousand dollars is lower with higher coverage amounts.
  • If you are insuring mortgages on rental properties, you can also get bulk rates, transfer coverage to new properties and eventually use the proceeds of the plan to pay capital gains taxes.

Bank mortgage insurance is expensive

 Term life insurance is often cheaper

  • When mortgages are renewed, you usually renew your insurance simultaneously. If you have had a severe illness that would make you uninsurable, the bank will usually decline the mortgage insurance.
  • You own the policy, and it is guaranteed renewable – usually to age 85, although it would be costly at older ages. If you have your health, you will purchase new insurance at the end of the term.
  • Bank Mortgage Insurance does not offer preferred rates for healthy people.
  • Healthy and fit? Save big with new preferred life insurance rates that can save 35% or more.
  • The bank’s mortgage insurance premium can change when you renew the mortgage – usually, the term on a mortgage is 3 to 5 years, although amortized over 20 to 25 years. Ask to see the rate schedule – it will likely have different rates divided into five year age groups – e.g. 35-40; 40-45.
  • Premiums are fully guaranteed. Personal policies have guaranteed rates. They will have premiums that stay the same for ten years or whatever term you select 10, 15 or 20.
  • You have a separate policy for the mortgage and other policies for other life insurance needs.
  • You can combine all your insurance needs and get a lower rate with your plan.
  • The bank controls the money and pays off the mortgage – it is a declining amount.
  • You own the insurance, and it is not tied to the mortgage lender—complete freedom to change mortgage lenders.
  • If you renew your mortgage through a different bank or credit union to take advantage of a lower interest rate, you can’t take your bank mortgage insurance with you; you have to re-apply at an older, more expensive age bracket.
  • Your beneficiary can take the money and keep the mortgage if it is to their advantage. If a couple owns the home, you get two separate policies that double the estate’s payment if both partners die. For example, if you have $250,000 of mortgage insurance, the amount declines as you pay down the mortgage. With your policy, you would each have $250,000 for a total of $500,000, and it would not be decreasing.

Important money-saving tips for Canadian seniors

If you are reasonably healthy, why not get your cheap life quote based on your health rather than a guaranteed permanent quote that assumes you are not healthy. For example, a typical $15,000 guaranteed permanent life insurance quote would be $255 per month for a 70-year-old male if it is a guaranteed issue policy. On the other hand, a standard life quote for $25,000 (75% or more would qualify) would be only $99 per month for a healthy person. If you take medication to control blood pressure or cholesterol levels and it is working, you will likely qualify for standard issues. How many men or women at age 70 are not taking something?

Let our experienced agents go to work for you to get an inexpensive life insurance quote based on your health situation. We have access to dozens of companies that would like to provide an online quote for you. Let us help you get guaranteed life insurance quotes before you act on those cheap ones offered on the TV and in newspapers.

Business owners with creditor or term loan insurance

A recent business client was paying over $220 for life insurance of $150,000 on their business line of credit with three shareholders. They are now paying less than $100 per month for this policy. Do you have a line of credit where you are also paying for creditor protection coverage? Look at your bank credit card, line of credit or term loan contract or statement and then get a 10-year term quote and compare it for yourself. You work hard for your money so keep it for your savings or retirement account and not the bank’s insurance.

Avoid the bank mortgage hassle – Get term life insurance instead

When mortgages are renewed, you usually renew your insurance simultaneously, and if you have had a severe illness in that time, banks usually classify you as uninsurable. The bank can then decline the mortgage insurance.

If you renew your mortgage through a different bank or credit union to take advantage of a lower interest rate, you cannot take your bank mortgage insurance with you; you have to re-apply at an older, more expensive age bracket.

A bank’s mortgage premium can change when you renew the mortgage – usually, the term on a mortgage is 3 to 5 years, although amortized over 25 to 30 years. Ask to see the rate schedule – it will likely have different rates divided into five year age groups – e.g. 35-40; 40-45. You’ll be surprised to find the savings compared to a 10-year term insurance quote from our website.

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