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RateSupermarket.ca > Insurance > Life insurance > Life insurance guide

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Mortgage insurance covers the balance of your mortgage owing. It is also known as creditor insurance since it’s offered by creditors (typically your bank or lender). It has also been referred to as decreasing term insurance because the coverage decreases, as your mortgage goes down.

So, while your premiums stay the same for the duration of your mortgage, the coverage you’re receiving is actually declining with your mortgage balance. A lower mortgage over time means you’re receiving less coverage. In other words, as time goes on, you pay the same amount but get less coverage.

Life insurance products are not tied directly to your mortgage. That means that while your premiums will remain level for a period of time, so will your coverage – it doesn’t decline with your mortgage balance.

A complete breakdown of the differences between mortgage insurance and life insurance can be found here.

Life insurance is a contract between the policy owner and the insurer, where the insurer will pay the face value of the policy or coverage amount to a designated beneficiary upon death of the policy holder in return for premiums or regular payments for this policy.

There are many life insurance policy categories, names, and jargon but the two main types are: permanent life insurance or term life insurance.

Permanent life insurance means that the policy is valid for the whole life of the policy holder. While term life insurance means it is temporary coverage for a set term.

The main types of permanent life insurance include whole life, universal life and variable life. These are all designed to provide insurance protection for your entire lifetime, as long as you keep the policy in force (i.e. pay the premiums).

Term life insurance policies provide coverage for a specified period such as a certain number of years or a set age and then it expires, requiring you to get a new policy. The coverage, or what is also known as the death benefit, is paid out only if you die during the term of the policy. There are many different types of term policies that are commonly available such as one, five, ten, twenty or thirty years or until the age of 60 or 65, for example.

There is a type of policy called Term to 100 that is often categorized as a permanent life insurance policy but is actually a term policy that covers you to the age of 100.

The majority of the life insurance quotes on RateSupermarket.ca are for term life insurance policies, but you can fill out call back request. if you're interested in a permanent policy and we'll get a licensed agent to contact you to discuss your options.

This really depends on a numbers of factors including the age and health of the insured and if applicable the length of the term. Permanent life insurance will always cost you more than term life insurance.

It is best for you to compare life insurance quotes online and then speak with a licensed specialist to get the best rate.

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