转换本页为: 繁體中文

Mortgage Life vs. Term Life Insurance


Is mortgage or term life insurance the best choice for you?

  Whether you're buying a home for the first time, or refinancing an existing mortgage, someone has probably suggested you purchase mortgage insurance. But don't rush into buying a policy until you've looked at all the possibilities. You could end up saving money and getting added insurance coverage at the same time by purchasing a term life insurance policy instead.

What is mortgage insurance?

  Mortgage insurance, also known as creditor insurance, is offered by most banks and lending institutions. It is an insurance policy that pays the balance of your mortgage to the lending institution if a person listed on the mortgage passes away.

How does term life cover your mortgage?

  When you purchase a term life policy, you take into account all the money your family will need in case you are not around to help out. This includes your mortgage payments.

Mortgage insurance vs. term life insurance

  Depending on your age and health, the premiums on mortgage insurance can be much higher than what you would pay for a term life policy. Take a look at these comparisons for $150,000 coverage:

Age

Bank1

Bank2

Life Insurer 1 Term Rates*

Male

Female

18-29

$12.0

$13.5

$16.32-12.53

$9.04-9.60

30-35

$18.0

$19.5

$12.70-14.41

$9.77-11.89

36-40

$27.0

$30.0

$15.17-19.35

$12.66-15.72

41-45

$39.0

$43.0

$21.67-30.45

$16.85-21.51

*based on health style "3", average health.

What do all these numbers mean?

  Mortgage insurance applications don't ask your smoking status or height and weight. So if you smoke or are overweight, you may be better off sticking with a mortgage insurance policy, regardless of your gender or age. However, if you are a non-smoker and with a good health, you generally get a better insurance rate if you chose a term life policy over a mortgage policy.

Extra coverage with term life

  A Term life policy gives you added coverage and flexibility over a mortgage insurance policy;

  • The beneficiary of a mortgage insurance policy is the bank, whereas your family receives any payout from your term life policy directly. This gives them the flexibility of using the money to pay off debts, or, if they can still carry the mortgage payments, they can use it for investing and securing a future income.
  • Mortgage insurance policies only cover you for the amount of your mortgage you owe to the bank. As you pay down your mortgage, your coverage amount decreases with it. This is called a reducing balance. With a term life policy, you have a constant level of coverage for the whole term and are getting better value for your monthly payments.

Shop, compare and save

  When purchasing your new home, take the time to shop around for insurance. Compare the cost of a term life policy to a mortgage insurance policy. Chances are, if you're relatively young and in good health, you'll find a term life policy will have lower yearly premiums and offer more coverage and flexibility than a mortgage insurance policy.

  Please Note - Some insurance companies have different rules about what is covered and under what circumstances. The above information is for general reference only. Please check with your insurance provider for exact coverage rules and regulations.

  If you need more information about your term life insurance or need us to check the best we might find for you, please fill the following inquiry form and submit it to us. We will reply you as soon as possible.



客户服务: