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Philippe Alexandre

Originator Licence #M24002124
phil@philippealexandre.ca 613-318-6315

Mortgage Life Insurance

Your home is likely the biggest financial commitment you’ll ever make. If something were to happen to you, mortgage life insurance can help ensure your family stays in their home without the burden of mortgage payments.

What Is Mortgage Life Insurance?

Mortgage life insurance, also known as mortgage protection insurance, is an optional product that pays off all or part of your remaining mortgage balance if you pass away during the term. Your bank or lender may offer it to you when you sign your mortgage.

Mortgage Life Insurance vs. Term Life Insurance

These are two different products that can both protect your family, but they work very differently.

With mortgage life insurance from your bank, the coverage decreases as you pay down your mortgage, the payout goes directly to the lender (not your family), and your premiums stay the same even as coverage drops. You also cannot take it with you if you switch lenders.

With term life insurance from an insurance company, the coverage amount stays the same for the full term, the payout goes to your chosen beneficiary (your spouse, children, etc.), and your family decides how to use the money. It is portable if you change lenders, and it often costs less for the same or better coverage.

Which Option Is Right for You?

For most people, a standalone term life insurance policy offers better value and more flexibility than mortgage life insurance from a bank. Your family gets control of the funds and can use them for the mortgage, living expenses, childcare, or anything else they need.

That said, mortgage life insurance can be a good option if you have difficulty qualifying for traditional life insurance due to health conditions, since it typically does not require a medical exam.

What I Recommend

I always suggest my clients compare both options before committing. A qualified insurance advisor can help you find the right coverage for your situation. If you need a referral, I am happy to connect you with someone I trust.

Have questions about protecting your mortgage? Book a free 15-minute consultation and we can discuss your options.