Mortgage Protection vs. Homeowners & PMI
Homeowners Insurance – covers losses and damages to an individual’s house and to assets in the home. Homeowner’s insurance also provides liability coverage against accidents in the home or on the property.
PMI (Private Mortgage Insurance) – protects the lender against loss if a borrower defaults. Most lenders require PMI when a home-buyer makes a down payment of less than 20% of the home’s purchase price.
Mortgage Protection – protects You and Your family. Could you imagine the respect and appreciation your family will have for You, if you died, became disabled, or came down with a critical or chronic illness, and the Home was Secured because You have Mortgage Protection?
What is Mortgage Protection?
With two major types of Mortgage Protection insurance, you’ll want to know which is best for you, because you may or may not want or need both.
The first is typically…
- Non-Medical (meaning No Physical Exam is required)
- specific to the insured for the home, securing the family home from a premature death of the policyholder;
- fixed or level premiums, so your rates stay locked in as you age;
- portable and transferable from home to home;
- mortgage protection that says Yes to covering diabetes, high blood pressure and many other medical issues with Standard or even Preferred Rates.
The second is typically…
- protection for the policy holders themselves with living benefits including:
- Short-term Disability coverage
- Long term Critical Illness coverage
- Long term Chronic Illness coverage
- Involuntary Unemployment
- Cash Back or Return of Premium
- And other rider “Add-On” Benefits that may be available at the time of purchase
What does Mortgage Protection cover?
With No Physical Exam required, you could lock in low rates on available benefits such as:
- LIVING BENEFITS – Pays a lump sum of money to You if you have a chronic or critical illness.
- DEATH – Designed to pay off your mortgage loan(s) in the event of the covered individual’s death.
- DISABILITY – Pays your monthly payments if you become disabled and cannot work due injury.
- INVOLUNTARY UNEMPLOYMENT – This coverage pays your monthly premiums due to involuntary job loss.
- CASH BACK or RETURN OF PREMIUMS – 100% Refund of your premiums if benefits are not used by the end of term.
*Get a Quick Quote for more details now.
OWNERSHIP - Who owns the Mortgage Protection insurance?
From most lenders — Typically owned by the lender. The lender may control what happens to your coverage.
FROM SAF’s CARRIERS — YOU DO. You own and control what happens to your insurance coverage.
BENEFICIARY — Who determines who will get the benefits?
From most lenders — The lender is often the beneficiary. You may have no choice in how the proceeds are spent. The lender receiving the proceeds, generally applies it to pay off the mortgage.
FROM SAF’s CARRIERS — YOU decide who will be named beneficiary and receive the proceeds.
RENEWABILITY — Could my coverage be canceled by someone other than myself?
From most lenders — Your policy may be canceled by the lender or issuing company. Often, coverage ends with the expiry/cancellation of the mortgage.
FROM SAF’s CARRIERS — Only by YOU. Although your coverage offers mortgage protection it is not tied to a specific mortgage or need. When your mortgage is finished your coverage may remain in force, except in the event of non-payment of your life insurance premiums.
PORTABILITY — Could I continue the coverage if I change companies or move?
From most lenders — Your insurance may end when the mortgage is refinanced, repaid, assumed, canceled, the house is sold or the group policy terminates.
FROM SAF’s CARRIERS — YES. Coverage is portable and you can use it to cover another mortgage, if desired.
BENEFIT AMOUNT — Is the benefit amount Level?
From most lenders — Benefit typically declines in line with the outstanding mortgage balance, if it is decreasing term insurance.
FROM SAF’s CARRIERS — YES. Amount of benefit can remain level even though the mortgage balance reduces.
BENEFIT AMOUNT — Could I apply for more coverage than the mortgage amount?
From most lenders — Amount of benefit may only be for the amount of the mortgage, and there are limited options if your health changes.
FROM SAF’s CARRIERS — YES. Coverage could be higher than the amount of the mortgage to cover other needs.
CASH ACCUMULATION FEATURES — Could the plan be designed to build cash values?
From most lenders — These plans are typically group decreasing term only.
FROM SAF’s CARRIERS — YES. Depending on the life insurance coverage you choose you may be able to take advantage of tax deferred cash accumulation options.*
*SAF, their employees and insurance representatives, do not provide, on carriers behalf, legal or tax advice. The information given here is merely a summary of our understanding of current laws and regulations. Prospective purchasers are advised to consult their tax or legal advisor.
CUSTOMIZATION — Could my plan be customized to meet my individual needs?
From most lenders — Your plan is often mortgage-specific and may not be customized to fit individual financial protection needs.
FROM SAF’s CARRIERS — YES. Other benefits and features can often be added through optional riders.