Buy Term Insurance Instead of Mortgage Insurance

When buying a home or renewing a mortgage, many people think they are obliged to sign up for their financial institutions' mortgage life insurance. It's important to remember that you have options. Individual Term Life Insurance is a great alternative to your financial institution's regular mortgage life insurance because it offers you affordable premiums plus the following key advantages:

Greater control for you and your beneficiary. Mortgage life insurance bought from a lender will typically pay the death benefit to the lender at your death. Individual Term Life Insurance will pay the benefit to the beneficiary you choose (e.g., your spouse). This gives your beneficiary the freedom to choose how best to spend the money. For example, some may decide that paying down the mortgage is the highest priority, while others may want to use the money for a more pressing expense that arises at the time.

Coverage that doesn't shrink with your mortgage. The coverage amount under typical mortgage life insurance declines as your mortgage balance decreases. With Individual Term Life Insurance, your coverage amount remains the same.

No need to reapply. With mortgage life insurance, you have to reapply any time you switch lending institutions. But with Individual Term Life Insurance, unless you want to increase your coverage or terminate your plan, your policy is automatically renewed up to age 80 with no medical questions asked.

Remember, when thinking about your mortgage, Individual Term Life Insurance provides you with options.

To Maintain Your Family's Standard of Living

Life insurance is an important part of anyone's financial plan. Your spouse or family may find it hard to live the way they do now if something were to happen to you. The death benefit from a life insurance policy can help them maintain their standard of living by supplying funds they’ll need for:

• Mortgage, rent, car loan, or other debt payments.
• Replacement income for your dependants.
• Clothing and other expenses.
• Phone, utility, and home maintenance expenses.
• Final expenses such as funeral expenses

Certain types of life insurance may also provide benefits for you and your family while you're still living. Policies such as whole life or universal life accumulate cash value on a tax-deferred basis, and that value can be used to supplement your retirement income or help provide for a child's education.

Make sure you have sufficient insurance.

Why Own Permanent Insurance?

Permanent insurance is often referred to as universal life or whole life. This type of insurance combines pure insurance coverage with an investment fund. It offers the potential not only for lifetime protection and guarantees but also to build cash value. How that cash value grows varies based on the type of policy you have. The cost of this type of insurance is typically higher than term insurance.

Here are a few reason to consider a permanent insurance policy:

• Business succession planning
• Tax Sheltering long term, tax efficient investment strategies
• Capital gains funding
• Estate equalization

Often permanent insurance is the perfect choice for high net-worth individuals who are seeking tax-sheltered investments and have income levels too high for other tax-advantaged vehicles.