Life Insurance Company
- Protects your family
- Controlled by you
- Fully portable – transferable to any house
- Flexible – upon death, your family has the option of paying off the mortgage or investing the funds
- Allows shopping for better interest rates when mortgage renews
- Choice of life insurance plans and benefits
- Choice of amount of life insurance coverage and face amount does not decrease as the mortgage is reduced
- Coverage is convertible and renewable
- Expert advice – You deal with a professional insurance adviser about life insurance and all insurance coverage can be through one broker
Bank (Mortgage Insurance)
- Protects the bank
- Controlled by the bank
- Runs out when house is sold or traded
- Inflexible – the mortgage must be paid off regardless of interest rates and other investment opportunities
- No shopping – unless you are willing to pay higher premium and are insurable
- Limited choices
- Coverage must be equal to the mortgage amount and decreases as the mortgage is reduced (the premium does not!)
- Non-convertible
- A missed mortgage payment often means lost coverage