Skip to main content

Future Values: estate and financial advisors Calgary

Future Values: estate and financial advisors Calgary

  • Home
  • Why Us 
    • About Us
    • Philosophy
    • Planning and Process
  • Our Services 
    • Comprehensive Financial Planning
    • Individual Risk Management
    • Business & Professionals planning
  • Our Team
  • Connect With Us 
    • Client Testimonials
    • Blog/Articles
    • Financial Assessment Tools
    • The Value of Advice
    • In the Media
  • Contact

    You are here

  1. Home
  2. Blogs
  3. Mortgage Insurance 101

Mortgage Insurance 101

Submitted by Future Values on May 2nd, 2017

Executive Summary

Whether you’re a first-time home buyer, or purchasing a vacation property, if you have a mortgage your lender will encourage you to purchase mortgage insurance.

Like every other life insurance policy, a death benefit will be paid if the insured person dies. Mortgage insurance is usually not the most cost effective and flexible way to protect your assets and family.  In almost every case there are less expensive policies than those offered by lenders.

Watch the video here: https://vimeo.com/210055392

What you need to Know

As time passes and you dutifully make your mortgage payments, in addition to servicing the debt by paying interest, you are paying down the outstanding amount of borrowed capital.  Mortgage insurance will pay a death benefit equal to the amount of outstanding debt.  That is, each time you make a mortgage payment, or even an annual lump-sum payment you are lowering the amount of your death benefit.

Both borrowers are typically listed on the mortgage insurance, in a “first to die” arrangement, meaning that if either borrower dies then the benefit is paid.  That is appropriate for some couples, but not necessarily all, and it makes those policies more expensive.  You may be paying for insurance that is unnecessary, especially if a traditional bread-winner, care-giver arrangement is in place, where one partner works outside the home, and the other dedicates their life to working in the home.  If the non-earning partner passes away, some additional costs may arise for childcare, but the continued income from the other partner is still available to make mortgage payments.

More importantly, ‘regular’ insurance (universal life, whole life, term life) purchased with the assistance of a licensed insurance professional, it can be integrated with your overall financial plan.  The right type of life insurance can be purchased, and depending on age, health, and other risk factors, the most economical provider can be accessed. 

The Bottom Line

Mortgage insurance pays off your loan, directly to your lender.  Insurance you purchase personally pays the death benefit to your named beneficiaries.  The beneficiaries will then have freedom, they decide whether it is best to pay off the mortgage, and when.

And during the life of the policy, premiums compared to benefits are lower when you avoid mortgage insurance from lenders.

Interested in learning more? Contact our office today to meet us over a coffee.

Call 403.229.2123 or email info@futurevalues.com

 

Tags:
  • life insurance
  • Mortgage insurance

Book a Meeting

Archived Blog

  • February 2018 (2)
  • January 2018 (1)
  • November 2017 (2)
  • July 2017 (1)
  • May 2017 (1)
  • March 2017 (3)
  • February 2017 (4)
  • January 2017 (3)
  • September 2016 (1)
  • July 2016 (2)
  • May 2016 (1)
  • April 2016 (1)
  •  
  • 1 of 2
  • ››

Recent Blog Posts

  • Video: What’s Your Risk Management Plan?
  • Video: Don't Like Where You Are Financially? Change Your Behavior
  • Annual Market Update For the year ended of December 31st, 2017

Categories

  • education (1)
  • financial acronyms (1)
  • financial education (1)
  • financial planning (2)
  • high school (1)
  • Investment education (1)
  • investment education, compound interest, mutual funds, investing, financial planning (2)
  • Investment risk tolerance; retirement planning; mutual funds (2)
  • Investment statement, Quadrus, mutual funds, Investment education (2)
  • life insurance (1)
  • Mortgage insurance (1)
  • retirement savings (1)
  • savings (1)
  • teaching children about money (1)
  • youth (1)

Download our Free Whitepaper

Contact Us

Don't hesitate to get in touch with us.
We would love the opportunity to become your trusted advisor.

Phone: 403.229.2123
Fax: 1.866.509.6017
Toll Free: 1.877.229.2123

Email: info@futurevalues.com

Suite 201, The Heath Block
615 – 15 Avenue SW
Calgary, AB T2R 0R4

Book a Meeting

Download our Free Whitepaper

Quick Message

At Future Values Estate & Financial Planning we work as your personal financial advisors & planners, offering you a wide range of services that are designed to help our clients from Calgary as well as the surrounding communities: British Columbia, Alberta, Saskatchewan and Manitoba. Our services include retirement planning, insurance planning, risk management, financial planning and estate planning.

*The use of e-mail is not a secure medium and personal information should be transmitted by more secure means.

The information on this website is intended for residents of British Columbia, Alberta, Saskatchewan, Manitoba and Ontario only.

  • Contact
  • Sitemap
  • Legal, privacy, copyright and trademark information

© 2023 Future Values. All rights reserved.

Website Design For Financial Services Professionals