Are You Paying Too Much For Your Mortgage Insurance? | FBC, Canada's Farm & Small Business Tax Specialist

Are You Paying Too Much For Your Mortgage Insurance?

Are You Paying Too Much For Your Mortgage Insurance?

If you are considering or have elected to insure your mortgage with your local bank, there are some things you should be aware of. 

1. Although you pay the same premiums each month, the actual amount of coverage decreases as your mortgage decreases.

2. Coverage typically ends at age 70 regardless of whether you have paid off your mortgage.

3. There are often exclusions contained within the contract that aren’t typically included in most life insurance contracts. These exclusions could result in non-payment of benefits to the beneficiary.

4. If you move your mortgage to another financial institution, your insurance coverage terminates and you will have to obtain new coverage at your current age.

Cost Comparison
$500,000 Initial Mortgage Amount vs. $500,000 Level Benefit Amount

Gender, Age,
Smoking status

Bank (per insured)

FBC Financial & Estate Planning Services
(25 Year Term Insurance Policy)

Male Age 36
non-smoker

$100 monthly /
$1,200 annually

$52.91 monthly / $635 annually

Female Age 36
non-smoker

$41.25 monthly / $495 annually

Male Age 41
non-smoker

$145 monthly /
$1,740 annually

$78.33 monthly / $940 annually

Female Age 41
non-smoker

$59.58 monthly / $715 annually

Male Age 46
non-smoker

$215 monthly /
$2,580 annually

$127.92 monthly / $1,535 annually

Female Age 46
non-smoker

$92.50 monthly / $1,110 annually

 
Among the many benefits of purchasing term life insurance, your heirs will receive any proceeds over and above the outstanding balance of the mortgage. You also have the ability to convert your term policy to a permanent policy in the future.

Want to know more? Check out FBC Financial and Estate Planning or call 1-800-265-9237.

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