Personal Finance

Anybody get mortgage life insurance?

  • Last Updated:
  • Aug 1st, 2009 6:29 pm
[OP]
Newbie
Jul 25, 2009
1 posts

Anybody get mortgage life insurance?

Hi guys! Just joined here and have a Q about mortgage life insurance.
My husband and I are buying a home together and we are thinking about getting mortgage life insurance. Based on what I've read, most people seem to think mortgage life insurance is not worth getting.

Here is my situation:

Both my husband and I already have life insurance, but my husband's coverage is not enough to cover the mortgage amt (should the unfortunate happen), and his insurance company rejected increasing his plan.

According to my bank, my husband however would likely qualify for mortgage life insurance. So now I'm wondering, does this then make mortgage life insurance something to consider getting? Does anybody have it?

Also, do you need to be on the property title to be covered under mortgage life insurance? Both of us will be on the mortgage but we want the title registered under my name to take advantage of first time buyer's tax credits (my husband has owned property before).
8 replies
Deal Expert
User avatar
Aug 18, 2005
18709 posts
3328 upvotes
GTA West
What is the shortfall between the size of the mortgage and the amount of existing life insurance on your husband?

Have you tried a asking a broker to go through multiple underwriters to see if someone will insure you for term life?
What if there were no hypothetical questions?
Deal Expert
Mar 23, 2009
16991 posts
3854 upvotes
Toronto
It's comparatively easy to get mortgage life insurance... which tells you it's gotta be expensive (which it is).
Deal Expert
User avatar
Aug 18, 2005
18709 posts
3328 upvotes
GTA West
EugW wrote:
Jul 26th, 2009 12:10 pm
It's comparatively easy to get mortgage life insurance... which tells you it's gotta be expensive (which it is).
I wonder what would happen in this scenario:

The OP's husband applies for the Mortgage In His Name Only. This way, if he dies, the mortgage dies with him and they can't come after the OP or her home.

The only downside is that if they got divorced, it might be overly unfair to the husband if he's the one carrying the debt load and it doesn't get distributed evenly. Maybe they should make a contract between them that shows an agreement as to what they each pay per month, thus protecting the husband in divorce and the wife in the event of the husband's death without extra life insurance.

It this just crazy and wrong headed, or maybe there's some sense in this idea? I don't know.
What if there were no hypothetical questions?
Deal Addict
Jul 8, 2009
2028 posts
479 upvotes
Edmonton
I'm in this business. Do not get mortgage insurance. Get real insurance instead. Google CBC Marketplace for the expose done on mortgage insurance and you won't buy it.
Member
Jul 25, 2009
411 posts
1 upvote
It will be cheaper for you to get life insurance for the amount of your shortfall rather than getting mortgage life insurance.

Was a reason given for your husband's life insurance company decline?
Deal Fanatic
Jul 1, 2007
8220 posts
1153 upvotes
Wing Nut wrote:
Jul 26th, 2009 3:47 pm
I'm in this business. Do not get mortgage insurance. Get real insurance instead. Google CBC Marketplace for the expose done on mortgage insurance and you won't buy it.
You obviously didn't read the original post: the OP's husband has been declined for term life insurance already. If there is a need and no other alternative then they'll have to suck it up and get the mortgage life insurance.

Couple asides though
1) Neither of you will qualify for the first time Home Buyer Plan: if one spouse owned a house within the last 5 years you're disqualified
2) Generally in most provinces, as far as I know, a matrimonial home is automatically jointly owned and thus any mortgage against it is also joint. In any case, it's not a simple thing to put the mortgage in only one person's name and I don't think it absolves the surviving (non-mortgagor) spouse of the liability.
Deal Addict
Jul 8, 2009
2028 posts
479 upvotes
Edmonton
Thalo wrote:
Jul 26th, 2009 6:37 pm
You obviously didn't read the original post: the OP's husband has been declined for term life insurance already. If there is a need and no other alternative then they'll have to suck it up and get the mortgage life insurance.

Couple asides though
1) Neither of you will qualify for the first time Home Buyer Plan: if one spouse owned a house within the last 5 years you're disqualified
2) Generally in most provinces, as far as I know, a matrimonial home is automatically jointly owned and thus any mortgage against it is also joint. In any case, it's not a simple thing to put the mortgage in only one person's name and I don't think it absolves the surviving (non-mortgagor) spouse of the liability.
I did and was commenting on this:
....we are thinking about getting mortgage life insurance.
I guess I should not have ended it there. The OP says the existing insurer has ruled out more insurance added, but it's not clear what that means. I've had clients who have been denied or rated with one insurer who get an unrated policy with another. Shop around. BTW, the company that provided insurance when another company rated it )250%, I believe) was RBC Insurance.
Member
Dec 12, 2005
431 posts
49 upvotes
Richmond
I am not sure if you are aware of this but you can still get your husband in the title of the property. Same thing that happened to us. I had purchased a property previously but my husband has not. At the notary public, they suggested that we put my husband as the 99% owner and I'll be the 1%.

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