Mortgage life insurance
Mortgage life insurance can repay all or part of your mortgage balance if you die, so your spouse or loved ones can keep the home without having to shoulder the full debt.
Bank mortgage insurance or independent coverage?
You can insure your mortgage through your bank’s insurer or with an individual life insurance policy. Individual coverage often offers more flexibility:
- The benefit is paid to your beneficiaries, who decide how to use it.
- You keep your coverage even if you change banks or refinance.
- You can adjust coverage amounts over time.
Who is it for?
- Homeowners with a significant outstanding mortgage.
- Couples or families who need two incomes to comfortably pay the mortgage.
- People who want to leave a property to their heirs free of debt.
How to integrate mortgage coverage into your overall strategy?
Mortgage protection can be structured with term life that mirrors your loan term, or with permanent coverage if you also want to plan your estate. In many cases, an individual life policy offers better value than a product tied directly to the financial institution.
Client example — Joint life insurance for the mortgage
Profil
- Martin (38) and Julie (36)
- Homeowners
- Remaining mortgage: $420,000
- Two young children
Préoccupation
They wanted to ensure that if one of them passed away, the other could keep the home, avoid financial stress, and not be forced to sell the property.
Solution
They took out a joint first‑to‑die life insurance policy with coverage of $420,000, matching their mortgage balance.
Approximate monthly premium: $80/month.
Situation hypothétique
A few years later, Martin dies. Thanks to the insurance, $420,000 is paid out tax‑free. Julie can repay the mortgage in full.
Résultat
- ✔The house is fully paid off.
- ✔Julie can stay in the home with the children.
- ✔She no longer has a monthly mortgage payment.
- ✔The family maintains financial stability.