You have purchased a new home and now need mortgage insurance. Mortgage Life Insurance is a type of insurance designed specifically to repay any outstanding mortgage debt in the event of homeowner death or long-term disability. It protects the lender and investor, not the homeowner.

You can buy the insurance from a mortgage lender or a life insurance from a life insurance broker. What is the difference?

A lender’s policy covers;

  • Only the person(s) listed on the mortgage. If two people are covered there is only one payout and the other loses the coverage
  • Only the balance owning on your mortgage.
  • The mortgage lender is automatically the beneficiary
  • The coverage amount decreases as the mortgage balance decreases and the premium remains the same.
  • When the mortgage is paid off, the coverage ends.

On the other hand a personally owned Life Insurance policy covers;

  • You, and your family, even those who are not responsible for paying your mortgage.
  • It can cover your mortgage, and your debts such as your line of credit, credit cards, last expenses, ongoing income for the family,etc.
  • You designate the beneficiary and how it can be used as paying your mortgage, medical expenses or your child’s education – whatever is best for you in your situation
  • The amount of coverage stays the same for as long as you own your policy , unless you decide to change it.
  • Your coverage is not tied to your mortgage, therefore, you can carry it with you if you move again.


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