Warning: Life insurance – Not Enough or Too Much?

Do you have enough insurance, click on this calculator to see:

http://ivari.ca/myinsuranceview/

WARNING:
Did your bank offer you mortgage life insurance? Powerful reasons to say “NO” to the bank’s mortgage insurance:

  • When you obtained your mortgage, were you stunned by the bank’s high cost?
  • Did you know you may not have mortgage insurance protection at the bank even though you assume you are approved and are paying the premiums?!

More Reasons To Avoid Bank, Credit Union, or Trust Company Mortgage Life Insurance

1) While the monthly premium is generally locked in at the rate per $1000 according to the age of the older insured person, the amount of the payout shrinks as the mortgage is paid down.

What does this mean for you? The cost of mortgage insurance becomes very expensive as every week passes!

The graph in figure 1.1 shows a $100,000 mortgage with an amortization period of 25 years, at an interest rate of 6.7%. The balance owing declines as illustrated.

Declining balance vs  level coverage

To illustrate the problem, let’s say you pay $50 per month for bank mortgage insurance at year one. After 15 years, you continue to pay $50 per month, but for only about $60,000 of protection. After 20 years, you continue to pay $50 per month, but for only about $40,000 of protection. The price per $1000 of insurance keeps going up!

With our low-cost solution, upon death your beneficiary receives the full $100,000. And yet the premiums remain very competitive to the bank’s! If you are over 30 years of age and a non-smoker, your premiums just can’t be beat by the banks!

2) When you die, the bank receives the proceeds. You cannot assign anyone else, including family members, as beneficiary.

In contrast, with our solution, you appoint a beneficiary who can use the proceeds in whatever manner he/she wishes. If it is wiser to invest the proceeds rather that pay off a low interest mortgage, the beneficiary has the choice.

If your family does decide to pay off the mortgage, they can keep the balance of the proceeds. In the example above, if you died 15 years later, your family would keep about $40,000 and also have the home completely paid off! You get unparalleled value!

3) Any change to a mortgage document – refinancing or a change of address, for instance – opens the door to collapsing the mortgage insurance agreement with the bank.

You are then required to reapply for insurance, and rates increase with age upon renewal. If your health is poor at that time, the application may be turned-down, leaving you with no protection.

With our solution, your protection is guaranteed for the full length of the term, regardless of any change in your health, and is completely independent from any changes made to your mortgage, including refinancing or transferring the loan to any other lender.

Important notice: Our mortgage insurance plan does not replace CMHC mortgage insurance, which is insurance you buy when you can’t put at least 25% deposit down to buy your home.