Using term life insurance to help protect your mortgage

Using term life insurance to help protect your mortgage

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Most Canadians wish to own a house.

After all, it symbolizes stability, safety, and the opportunity of building a happy and stable life.
Further than that, owning a home can also be a cornerstone of your family’s financial future since it is a substantial asset that is prompt to grow in value. Homeowners need a way to protect their mortgage from falling to their partner or a co-signer if they are no longer around. What many homeowners don't know is life insurance and your mortgage can go hand in hand - making the right plan essential to protecting your loved ones from inheriting a large debt after you're gone.

According to the Bank of Canada, Canadians owe about $2.17 trillion in household debt, and more than 70% of that is residential mortgage debt. As it shows, sometimes it is hard to meet the financial responsibilities of owning a home. 

Now imagine how hard it could get if something happens to the family’s breadwinner. 

Why term life insurance is a better value than your lender's insurance

When you buy a term life insurance policy, you get to choose a coverage amount and term length that meets your needs. Commonly, these terms start at five years and can go up to 30 years - or more. If mortgage protection is your primary goal, pick a coverage amount that would pay off your mortgage and a term length that is at least as long as your home loan.

But for most families, there’s more financial protection needed than merely an amount that covers your mortgage payment. You should consider income replacement for both spouses, day-to-day bills, and the cost of childcare and your children’s education… to name a few of our many financial responsibilities. When it comes to your mortgage and other day-to-day expenses, the right life insurance plan can be the perfect safety net for your loved ones.

The benefits of our term life insurance plans

  • No medical exam's required.

Our term life insurance features an incredibly smooth application process that makes it easier for anyone to get insured, regardless of their health status or health history.  

For those with medical conditions, such as high cholesterol or hypertension, a term policy can be a great alternative to traditional life insurance plans that use health as a pricing factor.

Since we don’t require any medical exams, you can quickly get the coverage you need without exposing your pre-existing conditions. For us, nothing should get in the way of keeping your home in your family’s hands. So if you don’t want to go through the time-consuming hassle of getting a medical check-up, our insurance plans are the right answer for you.

  •  Protects you and your family - not your lender.

This is a significant difference that many people aren’t aware of when shopping for a plan. Claims from lender policies are paid directly to them, not your beneficiary. With a term life insurance policy, things work differently. The benefit of your policy goes straight to your beneficiaries and your beneficiaries only. And the best part is that they can use it in whatever way they wish. Besides helping pay the mortgage, the benefit is also useful for other extra expenses, such as college tuition or debts. It is entirely up to them to choose how to manage the benefit. 

  • You keep your coverage, even if you move.

Having a life insurance plan that moves with you is a huge benefit for homeowners. With traditional mortgage insurance plans from your lender, the moment you move is the moment you need to reapply for coverage, which can mean buying coverage at a higher cost. With our term life plan, you and your loved ones remain financially protected no matter if you're changing homes or not. There is no need to apply for another plan and potentially face higher premiums. Regardless of your home ownership status or remaining mortgage balance, our plan remains in place for as long as you need them. 

  • Paid off your mortgage? Your coverage continues.

Mortgage insurance through your lender immediately ends once your mortgage is paid, leaving you without a financial safety net. Your lender’s plan decreases in value the longer you have it, and the more you pay down your mortgage. With our Termlite plan, your coverage amount remains the same for the entire length of your term. This way, your family remains protected, always. A paid-off mortgage doesn’t mean you no longer have financial responsibilities - if you have dependents, you need a plan that is always in place. 

  • A quick and easy application process.

As we mentioned above, we don’t require you to undergo a medical exam to apply for coverage. Our application process begins online with our short free quote form. Once submitted, a local agent reaches out to you and asks a few health questions to get you an accurate quote. Then once you’re ready, you can purchase the plan right over the phone and complete the process. Next, we email your policy to you, and your coverage begins. We’ve done away with the roadblocks that come with traditional life insurance, that stop people from finding the coverage they need for their family. 

Life Insurance and Your Mortgage

When you have people to look after, and you own your own home, it makes financial sense to have a life insurance plan at the ready. Leaving your mortgage behind for your family puts unnecessary stress on after losing someone they loved. If you are interested in seeing your term life insurance options, please feel free to complete our short free quote form. That will get you connected with a helpful advisor who will be more than happy to help you find a plan that suits your lifestyle.


Written by Diane Taes

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