Canadian CANNAINVESTOR Magazine Canadian Publicly Traded April / May 2019 | Page 185

o simplify we’ll review mortgage insurance versus term insurance;

1. More Protection:

With mortgage insurance, your bank actually owns the policy, not you. If you were to die before your mortgage was paid off, the bank would get the proceeds from the policy. Your estate would not receive a cent. So, who is really protected here…you or your bank? Term insurance pays the proceeds to your beneficiaries who can then choose to pay off your existing mortgage…or not.

2. More Flexibility:

Mortgage insurance from your bank is tied to the home it was purchased for. If you move, refinance or renegotiate your mortgage, you cannot transfer your policy and you will have to requalify. Term insurance is attached to the person, or persons, the policy is covering and stays with you regardless of where you live, how many times you move or if you refinance your home.

Plus, a term insurance policy can be converted to an eligible permanent plan any time prior to the policy anniversary that is closest to the life insured’s 71st birthday.

3. More Value:

You may not have considered this, but mortgage insurance only covers the outstanding balance of your mortgage. In other words, the benefits of your policy decrease as you pay off your mortgage, even though the cost you pay remains the same. When your mortgage is paid off, the policy is no longer in effect. With term insurance, the face value, or death benefit amount, doesn’t change regardless of whether your mortgage is $100,000 or $0.

4. Cost:

While you definitely get more value with term insurance often times its actually cheaper.

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