Real Estate

Life Insurance for RBC mortgage

  • Last Updated:
  • Sep 6th, 2021 12:10 pm
[OP]
Newbie
Aug 21, 2019
27 posts
5 upvotes

Life Insurance for RBC mortgage

Hi everyone,

Hope you guys are doing well! I just purchased a home and used RBC as my mortgage lender. They included something called Home Protector Life Insurance which is a Life and Disability (Waive Critical Illness). I asked my RBC mortgage advisor who said that I cancel it within 30 days of the start of my mortgage. This leads to my question: should I cancel this one and shop around for life insurance? Secondly, do I even need life insurance to begin with? I'm 31 and work as a nurse (remotely). Any advice would be helpful and thanks!
10 replies
Deal Addict
User avatar
Jul 4, 2009
1595 posts
960 upvotes
Windsor, ON area
If you have a wife and family, it's always good to have life insurance so that they can manage financially without you.

Our mortgage is with RBC as well, and their life insurance and disability insurance is very expensive compared to getting it elsewhere, at least in our case.
Member
Apr 27, 2014
377 posts
131 upvotes
Mississauga, ON
Don't ever buy life insurance on the mortgage it's a huge scam. You pay the same premiums while the total loss exposure is constantly decreasing via mortgage payments.
Deal Addict
Jul 3, 2007
4057 posts
4538 upvotes
Toronto
expatflame wrote: Don't ever buy life insurance on the mortgage it's a huge scam. You pay the same premiums while the total loss exposure is constantly decreasing via mortgage payments.
yep , shop for a term policy instead that pays cash
[OP]
Newbie
Aug 21, 2019
27 posts
5 upvotes
Hey everyone, thanks for answering all of questions. really appreciate it!
Deal Addict
User avatar
Nov 30, 2005
1849 posts
1434 upvotes
Ottawa, ON
kittypink wrote: If you have a wife and family, it's always good to have life insurance so that they can manage financially without you.

Our mortgage is with RBC as well, and their life insurance and disability insurance is very expensive compared to getting it elsewhere, at least in our case.
We have our life insurance with RBC (through a broker) and they were one of the most competitive. However, agree with all and echo not to get the mortgage life insurance. Much better products out there.
Deal Addict
Jun 26, 2019
2003 posts
1734 upvotes
GTA
sasukesharigan wrote: Hope you guys are doing well! I just purchased a home and used RBC as my mortgage lender. They included something called Home Protector Life Insurance which is a Life and Disability (Waive Critical Illness). I asked my RBC mortgage advisor who said that I cancel it within 30 days of the start of my mortgage. This leads to my question: should I cancel this one and shop around for life insurance? Secondly, do I even need life insurance to begin with? I'm 31 and work as a nurse (remotely). Any advice would be helpful and thanks!
When I bought my house I got the RBC insurance just for a number of weeks as I was waiting for my medical to be completed for my other life insurance. Then I cancelled the RBC mortgage insurance as soon as the other one came into effect. As others have said, the Home Protector Life Insurance is a bad deal and just not good value. Private life insurance is much cheaper.

In regards to needing insurance, in most cases this comes down to if you have dependents or not? If someone relies on your income for food/shelter, then life insurance is always recommended. However, if you're just a single person, who's estate will be inherited by some random family member who is no way dependent on your income, then you could give it a pass if you want.
Member
User avatar
Jan 7, 2019
368 posts
373 upvotes
Mortgage insurance insures that your mortgage will be paid off in full if you were to pass away. This is definitely a very good thing to have but like what others have said, it is on the balance of the mortgage.

As you pay down your mortgage, the insurance is worth less and less.

A term insurance from RBC or another insurance provider would be better for the long term.
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Deal Addict
User avatar
Jan 2, 2012
4403 posts
2577 upvotes
Toronto
Also with mortgage insurance, typically the lender is the named beneficiary so they would automatically get full proceeds to pay off the mortgage.

If you simply got term insurance for the same duration and amount required, then your spouse/kids would be beneficiaries and there would be more flexibility on what to do with the funds should the need ever arise. Paying off the mortgage 100% may not be what the surviving spouse wants to do.
[OP]
Newbie
Aug 21, 2019
27 posts
5 upvotes
everyone thank you again! cancelled my life insurance policy with RBC. Will wait and shop around for a term policy
Newbie
User avatar
Jul 17, 2012
16 posts
11 upvotes
TORONTO
Good choice to cancel it. As others mentioned, you will be much better off with a simple term policy which has beneficiaries you choose who would get the full overage amount and not a lending institution. By the way, mortgage insurance is also bad from the perspective that it often uses the same rate for smokers and non-smokers whereas a standard term policy will come up much cheaper if you are a non-smoker.

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