How to Buy Mortgage Insurance?

Here are two ways you can buy Mortgage Insurance:

First - In case of death or disability, your lender tries to sell insurance to cover your mortgage. They will usually make it a part of the lending process. The mortgage application will have a few medical history questions that the agent will ask you. If you answer no to all the questions, they say you'll qualify for the insurance.

Second - The best way to get mortgage insurance is through a government licensed life insurance agent. A licensed life insurance agent has to undergo proper training and education before selling personal insurance. Their in-depth knowledge about the different plans and companies for personal insurance can guide you.

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Difference between lender mortgage insurance and the insurance plan bought from a licensed agent

First - The bank's mortgage insurance is owned by the bank, meaning the insurance company will pay the bank any balance on your mortgage. Whereas buying one from an independent agent, you'll be the owner of that policy. The insurance company will pay the insured amount to your beneficiaries, who can decide whether or not to pay off the mortgage.

Second - The bank's mortgage insurance is a declining coverage, meaning when you pay down the principal of your mortgage, your insurance coverage will be declining simultaneously. In comparison, the policy bought from an agent may cover you for the full amount that doesn't drop as you pay down your principal.

Third - If you decide to change the bank when you renew the mortgage for next term and get insurance from the new lender, and if your health has declined, you may fail to qualify for the coverage. Simultaneously, the policy you bought from an agent will remain unaffected if you change your lender. In fact your mortgage insurance policy that you buy from an independent agent has no direct connection to your mortgage or the property you own or are in the process of buying. So even if you sell your home your policy will continue as long as you keep paying the premium.

Thinking of Shopping Mortgage Insurance?

It is very important to look for a licensed and experienced agent's services when shopping for mortgage insurance. It will be a smart move to seek help from a life insurance broker that deals with multiple companies to shop for the best rates and plans that fits your situation and budget.

Get In Touch With Us

At LifeSmart Insurance, we provide simple and affordable mortgage insurance, life insurance, disability insurance and critical illness insurance plans. That can help you and your family survive financially in case of death, disability or a major illness.

Call us now to schedule an appointment. We can meet with you anywhere in Greater Vancouver while following the COVID -19 safety regulations, OR we are ready to meet with you over the internet with the Zoom meeting platform. We can provide our services over the internet anywhere in BC and Alberta.

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