Life insuring your mortgage

Kelowna columnists write about the importance of getting insurance for your mortgage

This week we will go over the importance of purchasing life and disability insurance for your mortgage and the options available to you. A lot of homeowners are reluctant when it comes to purchasing life and disability insurance – they don’t want to add the cost of insurance to their mortgage payment.

One of the biggest mistakes you can make is when you sign your mortgage and decline the insurance thinking you will research it on your own. It’s not surprising that homeowners balk at mortgage insurance because most of us feel we are already stretching our monthly payments to the maximum. Think of it as you can’t afford to be without it. Your family could be left holding a debt on what tends to be a person’s largest individual financial obligation. It is especially important for first-time or young buyers to get coverage because the mortgage balance is usually high and the premiums in most cases tend to be much lower because of their age. The ideal time to look at your options is when you start your mortgage.

All lenders offer mortgage life insurance however getting insurance through an independent broker to cover your mortgage is usually a better option. This affords you the opportunity of switching lenders later on. As an example, five years down the road your mortgage becomes available for renewal and another lender is offering you a better rate. You can switch the mortgage and not have to re-qualify for your life insurance. This reduces the risk of facing higher premiums because as we age the premiums increase with new policies. Worse yet you may find out at the time that you are uninsurable. Mortgage Life Insurance with an independent will be for the full amount of the mortgage and not based on your declining mortgage balance. You do have the option of reducing your premiums when the mortgage balance decreases however when you are tied to a lender the insurance coverage is for the mortgage balance only and the premiums will remain the same regardless of the balance. If something were to happen to both you and your spouse with an independent the insurance would pay double. A lender insurance policy will pay your mortgage balance only.

Finally remember it isn’t just an untimely end that will cause a need for insurance to protect your family. You should as well consider disability and critical illness insurance in case you become unable to pay your mortgage due to serious illness or injury. A typical disability policy will only pay 60 to 70 per cent of your monthly income so there is still a gap. Coverage will be only for your mortgage payment with a lender however with an independent you have the option of insuring for a higher monthly amount so you will also be covered for other monthly expenses.

Of Prime Interest is a collaboration of mortgage professionals Trish Balaberde (250-470-8324) & Darwyn Sloat (250-718-4117) Christine Hawkins (250 -826-2001)

Just Posted

Scammer targeting elderly in Kelowna with broken-down vehicle story

A door to door scammer is in Kelowna, targeting seniors according to Kelowna RCMP

Kelowna’s definitive Christmas market list

We’ve prepared a list of every market in the Central Okanagan

Okanagan volunteers reflect on building classrooms in Nepal

Through the charity Her International, the volunteer group built four classrooms

Cool Arts’ double header event features Lake Country artist

Celebration of artist Mark Mercer’s work to run alongside community art night in Kelowna.

Kelowna rallies around father of five after cancer diagnosis

Fundraisers are planned throughout November

Weekend weather update: Crisp and sunny

This weekend will see lots of sunshine and below season temperatures for the Okanagan, Shuswap and Similkameen.

Canada’s health system commendable overall but barriers to care remain: UN

The United Nations says Canada’s health care system is “commendable” overall but vulnerable groups still face barriers to quality care.

Unique technology gives children with special needs more independent play

UVic’s CanAssist refined seven prototypes aided by $1.5M government contribution

$224.5 million announced for Highway 1 bridge replacement in Sicamous

Transportation Minister Claire Trevena says bridge option will be announced next month

Kelly Ellard’s boyfriend has statutory release revoked

Darwin Duane Dorozan had several parole infractions that found him ‘unmanageable’

Accident north of Vernon involves SUV and semi truck

Minor delays reported in Highway 97 crash

Ontario driver rolls car in Okanagan

Crash near Vernon follows reports of erratic driving

Doctor’s note shouldn’t be required to prove you’re sick: poll

70% of Canadians oppose allowing employers to make you get a sick note

German-born B.C. man warns against a ‘yes’ vote on proportional representation

Agassiz realtor Freddy Marks says PR in his home country shows party elites can never be voted out

Most Read