| Life Insurance Vs. Mortgage Insurance |
| TRADITIONAL TERM LIFE INSURANCE PLAN |
LENDING INSTITUTION MORTGAGE INSURANCE PLAN |
| 1. Covers mortgage and many other types of loans and financial needs |
1. Coverage is limited to your mortgage only |
| 2. You can choose the amount of coverage you need for life, disability and critical illness insurance |
2. You can’t choose the amount of coverage and the coverage amount corresponds to the balance of the loan |
| 3. Coverage stays the same for the duration of the term |
3. Declining coverage with each passing year based on mortgage balance |
| 4. You can choose anyone as your beneficiary |
4. You cannot choose the beneficiary and the lender is the only beneficiary |
| 5. Your beneficiary may spend the money as they want, with no restrictions |
5. The lender is the beneficiary & will repay the loan in the event of your death. |
| 6. Underwriting is done at the time of application |
6. Underwriting is done at the time of claim |
| 7. Discounts on your premium if you are in good health |
7. No discounts on premiums for healthy people |
| 8. You get the best rates based on your own health |
8. Rates are same for everyone and the older you are the higher the premiums |
| 9. Policy is owned by you and you are the owner |
9. Policy is owned by bank and the bank is the owner |
| 10. It’s an individual policy and you are in complete control |
10. It’s a pooled policy and you have no control |
| 11. You remain insured even if you change your lending institution. |
11. Your insurance ends if you change your lending institution |
| 12. Your premiums are fully guaranteed |
12. Your premiums are not guaranteed and will change as you age |
| 13. You will remain insured even if mortgage is in default |
13. Insurance will become void if mortgage is in default |
| 14. Your insurance policy is portable |
14. Insurance is not portable and will lapse if property is sold |
| 15. Policy is automatically renewable to age 75 |
15. Policy is not guaranteed at renewal |
| 16. Policy is fully convertible to permanent coverage |
16. Not convertible to permanent plan and most plans expires at age 70 |
| 17. Lower cost for same coverage |
17. Significantly more expensive |
| 18. Coverage is guaranteed for the term of the policy |
18. Coverage is not guaranteed |
|
