Difference between mortgage insurance and life insurance

[frankie_boyle]

I've just been offered a mortgage protection insurance product by my bank. is that the same as life insurance? If not, what are the differences?

[Forum Admin]

Hi frankie_boyle,

Great question. We've outlined the major differences between mortgage insurance offered by the banks and standard term life insurance on our mortgage life insurance page which will help you out greatly.

In a nutshell:

- A term life insurance policy will provide non-taxable premiums, with a fixed coverage value that you are able to choose the beneficiary for.
- Mortgage protection products typically are taxable, their coverage values decline with your mortgage as you pay it off and the bank is the beneficiary!

Although I'm not an insurance broker (and please seek your own advice) it doesn't seem like much of a comparison!

You can compare term life insurance quotes on RateSupermarket.ca as well. Hope that helps.

Kelvin

[ferrorolvans]

Well considering the whole difference and scenario.I always suggested to my clients was to take a term policy for the mortgage amount, and then purchase a small permanent policy so you'll always have that for final expenses.