Mortgage Life Insurance in it’s basic form is actually ‘creditor protection’ insurance provided to consumers by the banks or lending institution. Coverage is for the exact amount of the outstanding loan at any time, and the beneficiary is the bank or lending institution.
Because creditor protection insurance is also a form of group insurance, the policy contract is owned by the bank and not the consumer. The coverage is guaranteed only for one year at a time, and there’s no guarantees that the coverage will even be available next year, or if it is, what the premiums will be at that time.   

Term Life Insurance

 A far better alternative to traditional mortgage life insurance is renewable and convertible term life insurance.
Term life insurance is a life insurance policy that is generally purchased through an independent life insurance broker. Term life insurance policies not only provide better life insurance coverage, they do so at a cheaper price that mortgage life insurance. Term life insurance policies are generally shopped for premium by life insurance brokers, making it a competitive product. No such shopping exists for mortgage life insurance, banks simply present the premiums without any sort of comparision.

 Term life insurance policies have the following benefits:

• Substantially lower premiums than mortgage life insurance.
• Premiums guaranteed level for 10,20, or as long as 30 years.
• Coverage is guaranteed level – it does not decline with your mortgage balance.
• Renewable and convertible term policies have the option to lock in lifetime level premiums without a medical exam. If you become uninsurable, this option guarantees your ability to get life insurance. With mortgage life insurance, if you become uninsurable your ability to get life insurance at your next mortgage renewal is at risk.

 All in all, mortgage life insurance is considered a substandard life insurance policy and consumers should always investigate a term life insurance policy as a far better option.

 Canadians seeking mortgage life insurance can get an instant term life insurance quote right here on lifecover.ca – see the top of this page.