Mortgage Insurance is a life insurance policy that usually lasts the term of your mortgage. Your home is usually your biggest investment and upon a tragedy it could become your biggest debt. Mortgage insurance is offered by both lending institutions and insurance companies; however the contracts that are provided by the lending institutions have numerous of restrictions. The following video clip “In Denial” is an investigative report put on by CBC’s Marketplace. It discusses non-medical (post claim underwritten) mortgage insurance sold through the banks, and how claims are not being paid.
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The following charts will explain some of the differences between the banks and the insurance companies, as well as the different mortgage insurance rates between some of the largest banks and an insurance company.
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BANKS |
INSURANCE COMPANY |
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You are insured under a group policy |
You are insured under an individual life insurance policy |
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The lending institution is the beneficiary |
You name a beneficiary of your choice |
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The lending institution owns the insurance contract |
You are the owner of your mortgage insurance policy contract |
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The amount of insurance protection reduces as you make your mortgage payments |
The insurance protection never decreases unless its at your request |
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The policy is subject to change of the insurance provider and the terms of the agreement |
The insurance company cannot change the provisions or the premiums |
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The cost of insurance does not decrease even though the amount of protection does |
If you decide to reduce your coverage, your payments will be reduced as well |
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No changes or alterations are permitted under the group plan |
Any changes or conversions are permitted if requested in writing |
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The mortgage insurance protection will cease when the property is sold |
The mortgage insurance protection will stay in force when the property is sold |
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The insurance protection cannot be transferred and is limited to the mortgage of the original property |
This protection stays in place when you change homes and mortgage lenders |
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COMPARISON OF MORTGAGE INSURANCE RATES – BANKS VS INSURANCE COMPANY |
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Mortgage Amount of $300,000 |
Age |
TD |
RBC |
Scotiabank |
Our Rates |
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30 |
$30.00 |
$27.00 |
$27.00 |
$19.62 |
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35 |
$42.00 |
$39.00 |
$39.00 |
$19.62 |
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40 |
$63.00 |
$60.00 |
$60.00 |
$23.94 |
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45 |
$87.00 |
$87.00 |
$87.00 |
$33.66 |
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50 |
$132.00 |
$120.00 |
$120.00 |
$49.86 |
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DISCLOSURES |
* All banks rates do not include taxes |
*Includes all applicable taxes |
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* Rates for both male and female with the banks are the same for every age group, whether a smoker or non-smoker |
*Rates for females are lower depending on smoking/non smoking status, and health conditions |
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* All bank rates have been obtained from each individual bank’s website and could change at any time without notice |
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* Our Rates have been calculated based on the age of a non-smoking male |
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