Life · Insurance for the mortgage—not just the lender
Mortgage Life Insurance
Mortgage insurance with control over beneficiaries and coverage.
- Coverage aligned to the mortgage
- Family-controlled benefit options
- Portable individual-policy choices
What is mortgage life insurance?
Mortgage life insurance is life coverage intended to protect the household from the financial impact of a death while a mortgage is outstanding. It may be lender-offered credit insurance or an individual term or permanent policy sized to cover the mortgage and other family needs.
Do not confuse optional mortgage life insurance with mortgage default insurance, which protects a lender when a borrower has a smaller down payment. They solve different risks.
You do not normally have to buy optional mortgage life insurance from your bank to receive the mortgage.
Who needs mortgage insurance?
Consider it when a surviving partner or dependant could not comfortably carry the mortgage, property taxes and home expenses after your death.
- Single-income or uneven-income households
- Families early in a large mortgage
- Co-borrowers who rely on both incomes
- Owners with limited liquid savings
- Rental-property or business borrowers with personal guarantees
Bank mortgage insurance versus an individual policy
Lender coverage typically pays the lender and commonly declines with the mortgage balance. With individual life insurance, you select the beneficiary and coverage amount, the benefit generally stays level while the policy remains in force, and your family decides how to use it.
Individual coverage can often move with you when you refinance or change lenders. Lender coverage may need to be reapplied for. Underwriting timing and claim assessment also vary by product, so compare the certificate and policy—not only the monthly premium.
- Beneficiary: lender versus a person you choose
- Benefit: declining balance versus selected face amount
- Portability when changing lenders
- Underwriting and claim process
- Ability to cover income, debts and education too
How much is enough?
Paying off the mortgage is only one option. A survivor may prefer to retain cash for payments, reduce the balance partially, fund child care or replace income. A needs analysis should model the full household shortfall, then decide how much of the insurance is specifically allocated to the home.
What affects cost?
For individual insurance, age, health, smoking status, amount and term are key factors. Lender insurance is often priced on the original mortgage amount and age, premiums may stay level while the insured balance falls. Compare total cost and benefit over several years.
What about disability and critical illness?
Death is not the only risk to a mortgage. Disability insurance can replace a portion of income during an eligible disability, critical illness insurance can provide a lump sum after a covered diagnosis and survival period. Employer benefits, waiting periods and definitions must be reviewed before adding coverage.
Mortgage insurance checklist
Review coverage at purchase, refinance, renewal and major family changes.
- Confirm the beneficiary
- Read exclusions and eligibility
- Check renewal and conversion rights
- Compare individual and lender options
- Do not cancel old insurance until new coverage is active
Personalized quote request
Tell us what the policy needs to do.
We'll compare individual mortgage insurance needs using the borrowers, balance and remaining mortgage period.
- Product-specific questions
- Needs-led advisor review
- Your preferred follow-up time
Questions, answered
What people usually ask
Is mortgage life insurance mandatory?
Optional mortgage life insurance is generally not required for mortgage approval. It is different from mortgage default insurance that may be required with a smaller down payment.
Why can personal life insurance be better than bank coverage?
An individual policy can keep a level benefit, name your own beneficiary and remain portable. Bank coverage may still suit some clients, compare actual contracts and underwriting.
Does the benefit have to pay off the mortgage?
With lender insurance, the benefit is generally paid to the lender. With an individual life policy, the named beneficiary normally decides how to use the proceeds.
Can both borrowers be insured?
Yes. Options include separate policies, joint coverage or lender plans. Flexibility, cost and what happens after the first claim differ.
A quote should start with your needs
See the coverage gap before comparing prices.
Our guided interview organizes the details an advisor needs and lets you choose the best time for a follow-up.
Start my guided quoteSources and verification
We use official regulator, government and insurer information. Product contracts and eligibility change, verify details for your application.