Mortgage Life Insurance - Should you take your bank’s offer?

Most mortgage lenders offer mortgage life insurance and often, many home owner’s are pressured by the lender to take the lender’s in-house product.

Before you sign on the dotted line, you should know that the insurance offered by most lenders are not portable.  After the term of your mortgage, you may wish to switch to another lender (say, your current lender’s rate is not competitive).  If you switch, you will not be able to take the same mortgage life insurance with you.  You will have to re-qualify with the new lender for a new policy.  Given the passage of time, it may happen that you no longer qualify for insurance or the premiums are higher (since you would be older).  Thus, you may be forced to stay with your current lender.

The second disadvantage of lender’s insurance is that their rates are higher.   Lenders will have only one rate for both non-smokers and smokers.  Since smokers have a higher risk, non-smokers are effectively subsidizing smokers.

As the country’s largest independent mortgage brokerage house, we have developed our own mortgage life insurance product that better suits the needs of home owners.  The insurance is portable and the premiums are lower.  Secondly, smokers and non-smokers do not pay the same premium.  Non-smokers will definitely benefit from Invis’ offering (although I’ve seen cases where smokers too obtain a better deal).