Which is better: Personal Term Life Or Mortgage Insurance?

You’ve just made the biggest purchase of your life: A new home for you and your family.

Bank/Mortgage insurance

The Beneficiary is the lender.

Insurance amount decreases with your mortgage payments; but premiums stay the same.

Insurance is Not transferable to new lender. You have to apply all over again at your increased age cost.

Payout can be used only to pay off the mortgage.

Cannot change policy if situation changes.

Cannot add Waiver of Premium Most important, The medical underwriting is done at claim, which can become an issue.

Personal life insurance

With life insurance, you can select the beneficiary.

With life insurance, your coverage and premiums remain the same for the term chosen. You can renew the term if you still needed the coverage or later convert the term for permanent insurance, no medical needed. (So choosing the right company is also important) (Medicals are sometime more important than cost.)

Life insurance is good for the term insured for, whether it is10, 20 or 30 years and you can take it with you when you sell or change your mortgage, as many times as you want.

Payout can be used for whatever the family decide on atthat point in time based on their needs. (They can pay off the mortgage or invest the lump sum and use the interest to pay the mortgage payment, depends on the interest rate and the amount of the lump sum received. At the end of the mortgage, they can have the home and the lump sum invested.)

Policy can be modified as needed.

Can add a Waiver of Premium. (If you get sick or have a disability that last for more than 6 months, your payment can be waived after the 6 months, and the previous 6 months paid is reimbursed.

The medical underwriting is done upfront, once you qualify, your policy will not change, unless you change it for both CI and mortgage insurance.

Can get your own Critical Illness with medicals done up front and more illness covered, depends on your own personal situation and needs.