1. Know what you're buying!
For all of the time that you spent researching the best mortgage rate, don't ditch the savings by letting your bank or lender 'throw in' mortgage insurance. Do your research when it comes to mortgage insurance and find out why a term life insurance policy would be a better option
2. Watch this video
CBC did a feature on the issue of mortgage insurance sold by banks versus life insurance policies. It may have been filmed in 2008, but the message is still relevant. CBC Markeplace video - Mortgage Insurance - Not Always a Sure Thing
3. Compare the market
Life insurance and even mortgage insurance is a competitive business. Make sure you compare the market to get the best quote before you make a final purchase. RateSupermarket.ca allows you to compare quotes from over 20 of the top life insurance companies in Canada.
4. Get expert advice
As with most financial service products, it’s always best to speak with an expert. Click here to arrange a call back from a licensed life insurance broker.
5. Ask for a complete financial needs assessment
A financial needs assessment will help you determine exactly how much coverage you need by considering your assets, liabilities and future financial requirements. For example, the assessment will review how much debt you currently have outstanding, how much you'd like to put away for your child's education, whether you'd like to give a gift to charity or family, and so on.
6. Go with a blended policy
For the most comprehensive coverage, consider a combination of both permanent and term life insurance. The permanent coverage will help with funeral costs and allow you to leave a little extra for loved ones, while the term life insurance can cover the mortgage and any other debts.
7. Use a life insurance broker
A life insurance broker will work for you. They have access to numerous products and insurers so they can often find the best policy for you at the lowest cost. A broker can also talk to you about critical illness insurance and disability insurance.
8. Plan for the worst
There’s a very good chance you're not going to get out of this lifetime alive – none of us will! If you die unexpectedly, you are not off the hook for the debt you have piled up over your lifetime. Plan ahead to make sure your family and loved ones are not lumped with unnecessary financial stress when you pass.
9. Review your life insurance policy regularly
Over time your financial situation and needs will change. It's important to regularly review your life insurance policy to make sure it is up-to-date. When you took out the policy years ago, you probably thought the coverage would be sufficient enough so that in the unfortunate event of your death, your loved ones could maintain their quality of life without having to sell off any major assets (i.e. the family home). After every 2, 5, 10 years you should make sure that's still the case.
10. Never lie on your life insurance application.
Misleading or lying on a life insurance application can, and most often will, lead to a claim being denied in the future. That's not a very good position to put your family and loved ones in.