Real Estate

Do i need Life Insurance if already have Mortage Insurance ?

  • Last Updated:
  • Aug 15th, 2017 4:17 pm
[OP]
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Feb 16, 2017
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Do i need Life Insurance if already have Mortage Insurance ?

Not sure i am posting at right place .. today one of the insurance agent was asking me to take life insurance if something happens to me the other members of my family don't need to be stressed on paying off the mortgage and she was telling having life insurance will get you covered to pay off mortgage if something happens to you !

i was reading some blogs about difference between life and mortgage insurance and as per my understanding mortgage insurance also does the same ..so now i am confused should have both or having just mortgage insurance is enough ?
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Nov 22, 2015
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mattdominic wrote: Not sure i am posting at right place .. today one of the insurance agent was asking me to take life insurance if something happens to me the other members of my family don't need to be stressed on paying off the mortgage and she was telling having life insurance will get you covered to pay off mortgage if something happens to you !

i was reading some blogs about difference between life and mortgage insurance and as per my understanding mortgage insurance also does the same ..so now i am confused should have both or having just mortgage insurance is enough ?
Mortgage insurance provided by the lender is an upsell for the sales rep. Typically, they over-charge premiums and provide very little coverage and pay out very little unless you actually die.

Shop around for term life insurance if you're just looking to cover your family while you pay down your mortgage. It'll probably be cheaper and cover you for a lot more.
Member
Jul 16, 2006
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I have life insurance only to protect my family if i were to pass away. Life insurance allows them to use the money for everything including the mortgage.
Deal Guru
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Mar 23, 2008
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What the others have said... Get life insurance if you're concerned. Mortgage insurance is a "scam" (for lack of a better word) to protect (and financially benefit) the lender more than your family.

What other "family" are you interested in protecting from stress? Your spouse? Because unless someone else is on the mortgage, they're not responsible for your mortgage. It may affect the value of your estate, but nobody but your spouse (assuming they're on the debt) should be liable for your debts. That doesn't prevent the lender from wanting to try to cover their assets, though. They would like you to pay to protect them in the case of your untimely demise... Works great for them. Not so great for you.

C
[OP]
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Thanks for the replies ... how much i can expect to pay monthly / yearly for 300k premium roughly ?
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Mar 23, 2008
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mattdominic wrote: Thanks for the replies ... how much i can expect to pay monthly / yearly for 300k premium roughly ?
Between $20 and $500 dollars per month.

Call a broker. It's very dependent on age and risk factors.

C
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Oct 20, 2008
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Ditch mortgage insurance ASAP (normally pays out what' left on your mortgage, which drops over the years as you pay it down, but you don't pay any less in premiums) and look at life insurance and/or critical illness insurance instead.
[OP]
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DarkCanuck wrote: Ditch mortgage insurance ASAP (normally pays out what' left on your mortgage, which drops over the years as you pay it down, but you don't pay any less in premiums) and look at life insurance and/or critical illness insurance instead.
Is it possible to ditch mortgage insurance ? I Can just call the mortgage agent and tell him to remove it ? I Just signed all papers accepting it !
Last edited by mattdominic on Aug 14th, 2017 5:57 pm, edited 1 time in total.
Jr. Member
Oct 26, 2006
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mattdominic wrote: Is it possible to ditch mortgage insurance ? I Can just call the mortgage agent and tell him to remove it ?
You can opt out mortgage Insurance....read the mortgage contract to ensure.
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veelo wrote: You can opt out mortgage Insurance....read the mortgage contract to ensure.
+1. Check the terms to terminate the contract. You made a mistake going with mortgage insurance over life insurance. Call a broker.
[OP]
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Feb 16, 2017
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DarkCanuck wrote: +1. Check the terms to terminate the contract. You made a mistake going with mortgage insurance over life insurance. Call a broker.
CIBC says by law if i am not making 20% down its must to have mortgage insurance as per the bank ! i made only 5% down and was hit by this penalty ?
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Jul 18, 2016
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mattdominic wrote: CIBC says by law if i am not making 20% down its must to have mortgage insurance as per the bank ! i made only 5% down and was hit by this penalty ?
That sounds like BS. Are you reading that in your contract, or is that what a phone agent/CS agent has told you?

Edit: Wait a minute. Are you confusing creditor insurance with the obligatory ( < 20% Down payment) Mortgage Default Insurance from CMHC Insurance?
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Dec 1, 2009
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mattdominic wrote: Not sure i am posting at right place .. today one of the insurance agent was asking me to take life insurance if something happens to me the other members of my family don't need to be stressed on paying off the mortgage and she was telling having life insurance will get you covered to pay off mortgage if something happens to you !

i was reading some blogs about difference between life and mortgage insurance and as per my understanding mortgage insurance also does the same ..so now i am confused should have both or having just mortgage insurance is enough ?
pmed you.
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Nov 22, 2015
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mattdominic wrote: CIBC says by law if i am not making 20% down its must to have mortgage insurance as per the bank ! i made only 5% down and was hit by this penalty ?
That part is true.... but you're talking about something else entirely. The CMHC default insurance on high-ratio mortgages is not the same as life insurance.... CMHC protects the lender in the event that you don't pay and default on the loan - it has nothing to do with whether you're alive or not.

CMHC is a lump sum premium paid upfront based on a % of your purchase price. There are no ongoing monthly premiums to pay for CMHC.

Mortgage life insurance (MLI) is a separate creditor insurance product that pays out the remainder of your mortgage in the event that you die. You might also have mortgage disability insurance (MDI) and/or Job Loss protection, which makes your minimum payments in the event you are injured/laid off. Both of these options have a monthly premium, and pay out very little compared to what you're paying for them.
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Sep 13, 2016
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I think you could be mistaking CMHC insurance as mortgage insurance. CMHC insurance is one time charge, which is usually added on top of mortgage and you don't pay a monthly or yearly premium as such.
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Apr 5, 2009
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OP Like everyone has stated, its good to speak to an insurance broker to make sure to get coverage to take care of the mortgage in case you pass away. This being said, if you are with CIBC, buy the insurance from the broker first, and then once you get the coverage confirmed with the broker... cancel the mortgage life insurance. Last thing you want to do is cancel the mortgage life insurance and then run into difficulties getting regular insurance. Just act quickly and you can avoid/minimalize any premiums you pay for the mortgage ins.

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