As a homeowner, your mortgage is a key investment that provides you shelter — a basic human need — and keeps you warm and cozy at the same reliable address for years to come. When you live in a rapidly growing real estate market, you know that this investment requires regular, long-term payments to pay off. But what happens when you can’t meet this major financial obligation?
The untimely death of a spouse and parent can cause emotional distress, which is worsened by the drastic lifestyle changes that surviving dependents endure. Without the right financial protection in place, the loss of income could lead to property foreclosure. This means suddenly losing your home and being forced to uproot your life to make ends meet.
Mortgage insurance protects your financial investment and lifestyle comforts — and that starts with keeping your home. This helps surviving families meet the contractual obligations of the mortgage in the face of financial upheavals brought on by the death of a spouse, which results in loss of income required to pay the loan.
There may be no comfort following the loss of a loved one. However, there is peace of mind in knowing that you are equipped with financial resources to keep your home. Mortgage insurance ensures this and puts your family’s well-being above all else.
This insurance plan pays out a lump sum death benefit to your dependents, which can be used primarily to pay off the mortgage and secure your place of residence. Depending on your policy, your dependents may also be eligible for additional benefits from premiums paid.
Other options include paying for immediate and future expenses, such as bill payments to maintain quality of life despite the loss of income, and education of young dependents. Mortgage insurance secures your family’s financial future if you are unable to and ensures lasting comfort and optimal quality of life for years to come.
Since most mortgages are taken out from banks, they also offer mortgage protection to complement your loan. Unlike an independent mortgage insurance plan, the benefit from these bank-sponsored policies decreases as you pay off your mortgage. Further, your dependents are not eligible for additional benefits from premiums paid. If you need to renew your mortgage, you are also required to requalify for the protection plan.
An independent mortgage insurance policy places financial control in your family’s hands. They can allocate the benefit according to immediate and future needs, so they are guaranteed both home security and at least partial income replacement to afford living expenses. Your policy also remains in effect even if you switch lenders to avail of lower rates, with fixed premium rates, unless you actively choose to reduce the coverage amount based on your needs.
|Archway Insurance||The Bank|
|✓ Protects your family||✓ Protects the bank|
|✓ Gives you a choice of amount of coverage – you choose the amount of coverage you require and the coverage does not decrease as the mortgage is reduced||✓ No choice of coverage amount – coverage must be equal to the mortgage and has a declining balance (decreases as the mortgage is reduced – the price does not!).|
|✓ Underwritten at time of application||✓ Underwritten post claim|
|✓ Gives you control – you own the policy, choose the beneficiary and select the type of coverage you want.||✓ Policy controlled by the bank – the bank is the beneficiary.|
|✓ Is fully portable – your plan will continue when you move and you don’t have to buy a more expensive policy (if you are older).||✓ Not portable – protection runs out when the house is sold or traded.|
|✓ Provides flexibility – upon your death, your family has the option of paying off the mortgage or investing the funds if the economic conditions warrant it.||✓ Inflexible – the mortgage must be paid off upon death regardless of other investment opportunities.|
|✓ Offers you a choice of plans and benefits – you choose the type of policy and benefits you want||✓ Limited choices – limited plans and benefits offered and no conversion privileges|
|✓ Allows shopping for interest rates – upon renewal, you are not tied to one lending institution and can shop around for a better mortgage rate.||✓ No shopping – unless you are willing to pay a higher premium and are insurable.|
|✓ Provides stable coverage – Archway Insurance Life plans have built in grace periods from 30 to 90 days for missed premiums.||✓ No stability – a missed payment often means lost coverage.|
|✓ Coverage is renewable & convertible – term plans can be renewed after the initial term or can be converted to a permanent plan without a medical.||✓ Non-convertible|
|✓ Expert advice – you deal with a professional insurance advisor and all your coverage can be through one broker.||✓ No expert advice – you deal with a banker about insurance matters and your coverage is spread all over.|
Archway Insurance values a stable home life. Everyone deserves to be guaranteed shelter and a conducive environment for the entire family. For this, our brokers work with major insurance providers and tailor a mortgage insurance plan according to your lifestyle and budget. Our goal is to help families in Canada afford the ongoing mortgage payments required to keep their homes and secure their financial future with additional benefits for savings and education. Trust us to help you take care of your family.
Mortgage Insurance protects you, not the bank. With your own policy, you choose the beneficiary and select the type of coverage you want. In addition, the amount of coverage offered does not decrease as you pay down your mortgage.
With many banks, their version of mortgage life insurance operates on a principle known as post underwriting. This means that if you pass away, they will then look at your medical history to determine your health status at the time of application. However, individually owned mortgage life insurance completes all of the underwriting upfront so that once you are covered, you are covered.
Yes, one of the benefits of individually owned mortgage life insurance is that it is portable regardless of which lending institution you chose to deal with.
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