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Life Insurance vs. Mortgage Insurance

Life Insurance From an Insurance Specialist:

  1. Proceeds at death are paid to whomever you designate as the beneficiary (ie. family member) to be used as he/she sees necessary
  2. Policy can only be canceled by you, or by the insurance company for non-payment of premium
  3. A life insurance policy stays in force as long as you pay the premiums, regardless of changing homes or financial institutions
  4. Policy is owned and controlled by you
  5. Insurance coverage remains the same throughout  the term of the policy (ie. $300,000 in coverage will always be $300,000), and your costs remain constant over the term of the policy
  6. You receive professional, expert advice from a licensed, life insurance specialist
  7. Life insurance can be used to accumulate cash values and shelter money from taxes
  8. Underwriting is done at time of application, so you will know immediately if you are insurable and are receiving coverage for your premium payments

Mortgage Insurance From a Financial Institution:

  1. Proceeds at death are paid directly to the financial institution to pay off your mortgage balance
  2. Policy can be canceled by the bank if you change institutions to obtain a better mortgage rate (ie. after the 5 year term has expired)
  3. Insurance may be refused or the premiums increased if you change lending institutions, sell your home, pay off the mortgage, or increase your house size
  4. Policy is owned by the financial institution
  5. Insurance coverage equals the amount of the outstanding mortgage, so coverage decreases over time as your mortgage decreases, but the premium stays the same. Therefore, your insurance costs are increasing
  6. The financial institution representative is not necessarily a licensed insurance agent
  7. There are no cash values in the policy
  8. Underwriting is done at time of claim, so you cannot be certain that you will have coverage even though you have been paying premiums

Life insurance from a life insurance specialist protects you and your family.

Mortgage insurance from a financial institution protects the financial institution.

DISCLAIMER:

Manulife Securities Incorporated is a Member of the Canadian Investor Protection Fund

Manulife Securities Investment Services Inc. – Member MFDA IPC

Manulife Securities and the block design are registered service marks and trade marks of The Manufacturers Life Insurance Company and are used by it and its affiliates including Manulife Securities Incorporated / Manulife Securities Investment Services Inc

The information contained herein is for Canadian residents only and does not constitute an offer to sell or a solicitation in any jurisdiction in which Manulife Securities or its Advisors are not appropriately licensed or registered or where any Product or Service is not eligible for sale. Details are available on request.

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