Buying a home is probably the largest purchase you will ever make. It’s vital that you protect it – and your family’s future – by choosing the right insurance. But should you go the easy route and opt for lenders’ mortgage insurance because it’s so convenient to obtain and the premiums are simply added to your monthly mortgage payment? Here are some factors for considering other options:

With lenders’ mortgage insurance, the lender is the owner and beneficiary, not your family. But when you own the policy, you designate the beneficiary.

Lenders’ mortgage insurance only covers you for the declining balance on your mortgage but your premiums remain the same. With a personal policy, your coverage will not decrease.

Lenders’ mortgage insurance expires when the mortgage is paid off. Personal policy coverage continues after the mortgage is paid.

Your lender can change premiums or cancel the policy at any time. Only you make changes or cancel your personal policy and your premiums are guaranteed for the life of the plan.

Lenders usually do not allow your insurance to transfer to a new mortgage, lender, or possibly even a renewal but your personal policy moves with you.

Your lender may assess your coverage only when you make a claim, leaving you unsure of the coverage you have. With a personal policy, your medical history is reviewed before the policy is issued-so you can sure of coverage when needed.

So, you should go your own way. But what types of insurance are best? Permanent life insurance is among the few assets that provide tax-free liquidity to your estate precisely when necessary. Disability insurance is also worth considering because a disability accounts for 48 per cent of all mortgage forclosures.*

Include your spouse in your insurance planning, too. With four separate coverages – life insurance and disability insurance to cover you and your spouse-not tied to your mortgage, you enjoy portable coverage that won’t be changed or cancelled and the benefits are paid directly to your family.

So instead of taking the easy route and building lenders’ insurance into your mortgage payments, consider flexible coverage you control-build personal insurance coverage into your personal budget. Talk to your professional advisor to find the right mortgage, and other insurance protection, for you.

*1CIA 86-92 Aggregate Table & 1985 Commissioner’s Disability Table A (Experience Table)

This column, written and published by Investors Group Financial Services Inc. (in Québec – a Financial Services Firm), presents general information only and is not a solicitation to buy or sell any investments. Contact your own advisor for specific advice about your circumstances. For more information on this topic please contact your Investors Group Consultant. Insurance products and services are distributed by I.G. Insurance Services Inc. (in Québec – a Financial Services Firm). Insurance licence sponsored by The Great-West Life Assurance Company outside of Québec.

Contact David Brown at 250-315-0241 or at [email protected] to book your appointment.