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Mortgage Insurance Primer – Insurance Company vs. Lender offering

Having read the first post in this four part series, you now know that there are significant differences between mortgage insurance purchased from an insurance professional like me or purchased from the lender when securing your mortgage. This is the second in the series outlining the differences between the two.

Difference # 2

Individual Life Insurance

Individual premiums:

With an individual life insurance policy, the premiums you pay are based on your individual risk. Your health history and exam will help to determine how high or low your premiums are. Non-smokers and women pay a lower premium. The face amount of the coverage remains level for the term of the contract.

Lender Mortgage Insurance

Standardized premiums:

The mortgage insurance policy sold at the bank is a one size fits all policy. This means everyone who qualifies is considered to be of equal risk. The premiums you pay on mortgage insurance are a fixed amount based on your age and the amount of your mortgage. There is no discount for non-smokers or for women. The premium does not reduce as the mortgage is paid down.

Stay tuned for Difference # 3. If you want to have a conversation about, and/or review of your current strategies, please call (604) 607-3585.

Alexander ‘Lexx’ Potter

One thought on “Mortgage Insurance Primer – Insurance Company vs. Lender offering

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