Please use the following table as a comparison between bank mortgage insurance
and term life insurance.
| Question |
Term Life
Insurance |
Bank Mortgage
Insurance |
| Can the mortgage insurance be converted to permanent insurance? |
Yes, renewable and convertible
plans are available, which can be converted to a permanent plan without
any further medical questions.
|
No. |
| Do the death benefits remain the same? |
Yes, and only you can make changes
to the amount of coverage once a policy is issued.
|
No. Bank mortgage insurance only
covers the amount of the loan outstanding: as you pay off your mortgage the
benefit decreases (this happens quicker if you pay your mortgage at an
accelerated rate). |
| Who owns the policy? |
You do.
|
The lender holds the contract with
the insurance carrier. |
| Can I add optional benefits to the coverage? |
Yes, additional coverage may be obtained. The options
depend on the insurance carrier. |
No. |
| Do I have any control over the policy's beneficiary? |
Yes, you determine who the beneficiary is. The beneficiary uses the
proceeds to either pay none, part of, or all of the mortgage. |
No, the bank is the beneficiary. |
| What if I move? |
No effect. |
The insurance terminates with the mortgage. |
| What about medicals? |
Usually, but only once (prior to
approval). |
You might have to re-qualify
with new rates. |
| Can I keep this mortgage insurance for life? |
Yes. |
No, it terminates at age 65. |
| Are the premiums taxable? |
No. |
Yes (provincial sales tax). |