Tips, Advice, and Explanations from a Vancouver Mortgage Broker  

Archive for the ‘Mortgage Insurance’ Category

Mortgage Insurance vs Life Insurance

Saturday, April 26th, 2008

Many clients have asked about mortgage insurance, and several of them have asked for it by name. I highly recommend you NOT take your bank’s (or broker’s) offer of “Mortgage Insurance” whether it is life or disability, and instead speak to an independent insurance broker.

Many times, Mortgage Insurance underwriting is done AFTER there is a claim. In other words, clients will sign the insurance application, and, hearing nothing from the insurer, will assume they are covered. The insurance company will often only “underwrite” (assess whether or not you should get insurance) AFTER the client makes a claim. It will be when the claim is made that they will go over the original questionnaire, scrutinize the application, and then make a decision whether or not the client was insurable. This will potentially happen long after the client got the insurance and has been paying premiums! Life or disability insurance through an independent insurance broker is underwritten UP FRONT. This way, the client knows if they will be paid out in the event of the claim and will prevent any unwanted surprises in the future when it is too late.

The three videos below are all part 1, 2, and 3 of a mortgage insurance expose done by CBC Marketplace. They do a good job of showing some of the potential pitfalls of “mortgage insurance” and explain why it is not a great idea. Instead, they explain the stories of several Canadians who opted for Mortgage Insurance instead of independent life insurance.

Before you make a decision either way, check out the videos below!




Feel free to contact me with any questions and/or concerns about the foregoing video.

While I did not produce it, the video does demonstrate POTENTIAL problems that applicants may have with a Mortgage Insurance application.

Go independent! See a broker!