Insurance = Lifesavor

Mortgage Life Insurance is a form of protection that will pay off the balance of your mortgage should you or your partner happen to pass away, leaving the other with the remaining mortgage balance to pay down on their own. However, adding on yet another cost when you already feel as though you may be stretched to the limit with your monthly mortgage payments make it fairly undesirable to obtain for most people.

One of the main benefits to this type of insurance is that if it is tied to your mortgage and not to your bank, you are free to move your mortgage as you see fit and not re-apply with higher premiums. Many items on a mortgage application may change once you move into your house - you may choose to have a family and one partner may stay at home to care for the child. If you are down to one income and you lose that income, the mortgage company will still anticipate their monthly payments to be made.

Many people will say that they already have some form of Life or Disability insurance through their employers. These types of insurance are only as good for as long as you are employed through that specific company and may not be enough to cover the balance if they only cover a percentage of your payment.

My personal preference: I always like to put myself in the shoes of the borrower to see what I would do if it were me. Having recently gone through the process myself of obtaining Personal Life Insurance I do see value in Mortgage Life Insurance as a 'bare minimum' but would recommend a slightly different strategy.

We all know that if you decline the insurance now under the assumption that "you'll do it later, once things settle down around your new home" you won't be surprised to find out that you will simply never get around to it.

I accepted the Mortgage Life Insurance when I first moved into my home thinking that I would do the research on my own and if I found a better product I would immediately switch. Two years later and I am finally beginning to do so. Am I a procrastinator you ask? No...

Most of these products offered by Mortgage Brokers have a 30 day free trial. Feel free to sign up for that and if you have all of your ducks lined up in a row, you are covered for one month and then can move elsewhere if you so desire.

The main reason that you would move your insurance elsewhere after the 30 day free trial is up is because personal life insurance is quite often a less expensive alternative and offers more flexibility. For example: 50% pay down mortgage, 25% for children's education fund, 25% savings as opposed to 100% pay off your full mortgage balance with mortgage life insurance.

Moving is a big commitment and even if you aren't sure as to when you'll get around to the insurance side of it all, you should definitely commit to researching all the alternatives and finding the policy appropriate for you.

If you are looking to speak with a licensed insurance broker, I would highly recommend the services of the broker I myself have used in the past.