Life Insurance Versus Mortgage Insurance
View our life insurance versus mortgage insurance comparison to learn about the differences with these products.

Life Insurance Guide
Visit our life insurance guide to find out why term life insurance is a great alternative to mortgage insurance offered by your lender.

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When you take out a mortgage on a new home or arrange for mortgage refinancing, in Canada, most lenders will ask if you want to take out insurance that will cover you and pay off the remaining amount if you pass away. There are different names for this coverage including mortgage insurance, creditor insurance, home protection insurance, to name a few, however, they all provide the same basic coverage. Many Canadians take out this insurance with the lender, as it makes perfect sense to protect one of the biggest investments in your life, but are you paying too much?

Buying a house and taking on a mortgage is like buying any other product, it pays to shop around, compare mortgage rates and to speak to an expert such as a broker to help with your decision. It's also like any other product as many times you're offered impulse items or add-on options at the checkout, and you typically pay a higher price for this convenience. This is the same with mortgage insurance. Many lenders often charge a higher premium on their product for the convenience of purchasing it from the same place you got your mortgage. Again it is often worthwhile to compare life insurance quotes to see if you can save any money.

Mortgage insurance offered by financial institutions is similar to a standard Canadian term life insurance policy, as they cover you for a period of time and in the event of your death you receive a lump sum payment to help pay off any outstanding debts. "Term" simply means that you are covered for a certain period of time, such as 20 or 25 years, which can be matched to the remaining payment period you have on your mortgage, or it can be arranged to last until you turn 65 years old, for example.