In the National Post, David Menzies said, “Mortgage insurance is ‘robbery’… I had to pay a constant amount for a mortgage that diminished.”
In the Globe and Mail, Rob Carrick said insuring with a lender means your death repays the lender. Banks give your family NO SAY in how it’s used.
In the Toronto Sun, Linda Leatherdale pointed out how a lender’s insurance including mortgage insurance can be voided after death. Null and void. No money, no payment, no security for your loved ones.
In the Investment Executive, Gavin Adamson said banks and other lenders push creditor insurance for customers who do not have an advisor…” and perhaps that’s why their rates are high while death benefit is left to chance.
Recently in the Globe and Mail, Gail Johnson gave an excellent summary of this in her May 23, 2017 title: “Do you need Mortgage Insurance?”.
People pay too much and get too little. This happens with mortgage insurance. It’s in the news but people don’t realize how to get more and pay less. … We even protect what’s more valuable than your house or your mortgage, and that’s YOU!
I’ll change the names but here’s why you need to take charge of your future. Surely you want to put your money where it can do the best and protect your loved ones.
Bill and Sue in their 60s insured their mortgage but after Bill died, Sue learned the bank had cancelled Bill’s insurance. Sue protested, “we’ve been paying all these years!” The bank said Bill no longer qualified at the last renewal so recent payments only insured Sue. Sue got nothing from the mortgage insurance and had to keep paying the mortgage!
Jenn and Al were younger with a big mortgage and small children. I knew them well because I provided the actual life and illness coverage that paid them $150,000 when Al was diagnosed with cancer, and $500,000 after Al died. But that was supposed to secure the family’s lifestyle assuming the mortgage was gone – which it wasn’t, because again the bank’s mortgage insurance didn’t pay. Jenn was horrified, angry, and scared, asking me how the bank could do that, and how she would manage raising her children the next twenty years while still paying a house mortgage.
Getting what you need…
Proper analysis of your insurance needs at any age includes the following.
Notice how we include mortgage and other debts in the total picture of family security.
This way it costs less, and it pays more — guaranteed!
Lump sum a survivor needs immediately:
- Needed for death/burial
- Mortgage owing
- Line of credit owing
- Other loans, credit cards
- Lease obligations
- Education trusts for children
- Survivor’s emergency fund
- Business debts / obligations.
- Care for parents, charity, etc.
Plus monthly income to surviving family for a safe and worry-free lifestyle until children are grown (or retirement is set). $5000? … $8000? You decide the monthly income you’ll need, over how many years, so family can keep living the life you want for them.
And Critical Illness … Diagnosed with an illness, chances are we’re going to get better (and not die). But make sure you don’t let financial stresses complicate your worries at a time when you’re clearly fighting for your life.
Here we can:
- clear 12-36 months of mortgage payments
- permanently eliminate all other debts
- pay for costly uninsured medications
- buy faster treatment in or outside Canada
- get a health-break from your job or career
- increase child-care while you’re in treatment
- buy vacations to celebrate or speed healing
- avoid burning your hard-earned savings
- reduce stress, recapture health!
Your most valuable asset
Surprisingly most people don’t realize what is their most valuable asset. Is it a house? Is it your spouse? Certainly not the mortgage!!! So don’t sign a lender’s mortgage insurance without securing the real value your family is going to need.
Let’s say the house is worth $1,000,000 and the mortgage is $700,000. You still have something worth much much more. Imagine you’re 35 and earning $90,000 a year so your future income to age 65 should be at least $5 Million. Or age 45 working for $120,000 a year you’re expecting future income of $4 Million or more. We can do the math together.
YOU are the most valuable possession — you are your family’s financial security. (Non-working spouses are also “most valuable” for several reasons we can discuss.) Not the house, not the mortgage, but your power to earn money and to support the overall wellbeing of your loved ones through all the years ahead. This underscores why we include YOU and your mortgage & debts together so we can keep your family absolutely safe.
What could it cost?
Typically we see guaranteed life insurance costs at 1/4 to 1/2 of mortgage life insurance. Some recent examples for combined $1 Million of coverage include the following. Conceivably you could have $5 Million of insurance for less than your monthly car lease. Surely your family is worth immeasurably more than that!
- Spouses age 30: $43/month.
- Spouses age 40: $57/month.
- Spouses age 50: $121/month.
- Spouses age 60: $269/month.
These examples of course depend on age and health etc. Once you’re approved the insurance is guaranteed without any further questions.
Unlike Mortgage Insurance which:
- only pays remaining mortgage or debt
- checks health info only after you’re dead
- can be voided or cancelled without notice
- must re-qualify when you shop/change mortgage
- can leave family destitute, forced to sell or lose house.
LET’S SPEAK TODAY — FREE!
Reach us today for a trusted insurance advisor who is licensed, ready, and willing to serve and sustain your financial security. Reach me now at:Brian Weatherdon, MA CFP CLU CPCA. Certified Financial Planner. Certified Retirement Coach. 627 Guelph Line, Burlington, Ont. L7R 3M7. 905-637-3500 x 223