Mortgage Life Insurance Explained

3 Reasons Why Mortgage Life Insurance Might Not Be a Good Fit For You

Couple considering mortgage life insuranceWhen you sign up for, or renew your mortgage your bank will encourage you to take out their loan protection insurance at the same time. The idea being that the mortgage life insurance will pay off the loan in the event that you were to die before the mortgage is paid off. According to Which Mortgage Canada this might not be your best option. Here’s why:

1) Mortgage Life Insurance is more expensive

In a direct cost comparison given the example of a 31 year old with a $250,000 mortgage SLAW (Canada’s Law magazine) found that the banks mortgage life insurance policy was 40% more expensive than an equivalent term life insurance policy. Also, after 10 years the life insurance policy still pays out $250,000, while the banks policy still costs the same but pays out $50,000 less (the balance of the mortgage).

2) The bank get’s the money not your loved ones

The banks mortgage life insurance is actually a loan protection policy designed to pay the bank what’s left of the mortgage. The insurance company pays the bank directly.  With a term life insurance policy the insurance company pays your loved one and they can use the money how they choose.

3) Your mortgage may not get paid off after all

When you sign up for bank mortgage life insurance the form is very simple. It contains a few all encompassing questions about your health and little explanation. Whether you are covered or not is only decided after you die. The banks’ insurance company can legally refuse to pay out if they can prove something in your medical history (such as diabetes or high blood pressure) was inconsistent with the ticks on the form.

What is covered by Term life insurance is determined up front. Your medical history is taken into account and is included in the coverage.

So what are the advantages of mortgage life insurance?

If you buy your property with less than a 20% down payment mortgage life insurance is compulsory.  You are covered by CMHC insurance. First time buyers benefit from government backed insurance by encouraging banks to lend more.

If you buy your property with >20% down payment, mortgage life insurance is likely not a good fit and the only advantage is the convenience of simply ticking a box while signing up for your mortgage. Bearing in mind the caveats mentioned above.

Life Insurance – Diabetes

November is Diabetes awareness month and Diabetes Canada are helping to spread the word, starting with the most relevant facts.

Diabetes is a silent epidemic in Canada with 11 million people living with diabetes or prediabetes,” says Rick Blickstead, President and CEO.

It’s estimated 1.5million people in Canada are unaware that they have the condition, likely because people with type 2 diabetes often have no symptoms. Type 1 is a total lack of insulin; Type 2 is the body’s inability to use insulin effectively.diabetes questionnaire

Risk factors:

  • A parent, brother, or sister with diabetes;
  • Being a member of a high-risk group (Aboriginal, Hispanic, South Asian, Asian, or African descent);
  • Health complications that are associated with diabetes;
  • Having given birth to a baby that weighed more than four kilograms (nine pounds) at birth or having had gestational diabetes (diabetes during pregnancy);
  • Having been diagnosed with prediabetes (impaired glucose tolerance or impaired fasting glucose);
  • High blood pressure;
  • High cholesterol or other fats in the blood;
  • Being overweight, especially if that weight is mostly carried around the tummy;
  • Polycystic ovary syndrome;
  • Acanthosis nigricans (darkened patches of skin);
  • Psychiatric disorders: schizophrenia, depression, bipolar disorder;
  • Obstructive sleep apnea;
  • Glucocorticoid medication by a doctor.

You can find out your specific level of risk using this simple online quiz.

Diagnosed with diabetes? You can still get life insurance.

A diagnosis will likely mean changing the way you eat, and adding regular exercise into your routine to lower your glucose levels and keep your weight in check. It may require regular monitoring of your glucose levels and taking prescription medication. You doctor will encourage you to manage your lifestyle by reducing stress levels and keeping your blood pressure in check.

If you are living with Type 1 or Type 2, there are options available even if you have been declined life insurance by another insurer. For instance, No Medical Life Insurance may be a good possibility for you.

To find out which plan and coverage would be the right fit for you, contact an advisor that specializes in Life insurance for Diabetics.

Why Life Insurance Matters for Motorcycle Riders

It’s a sad fact that there have been a string of fatal motorcycle accidents in Windsor recently. This has prompted conversations with our clients about what would happen to their relatives if they were to become the victim of a motorcycle crash?

Updated: Motorcyclist who died in Lakeshore crash was father of five

Motorcycling Windsor couple identified as victims of allegedly impaired driver

UPDATE: OPP identify motorcyclist killed in Tilbury crash

'One-liners like you wouldn't believe.' Friends remember Essex man who died in motorcycle crash

Yes, all experienced riders have motorcycle insurance., but that’s not the whole story. Vehicle accidents are notorious for delays in payment. It is in the car insurance companies best interest to defend their clients and attempt to assign blame on the other party. In instances where a motorcyclist is hit by a car driver it can take months to resolve. While the vehicle insurance companies sort this out the relatives of the victim are incurring funeral expenses and covering the regular monthly bills that the victim would normally have paid.

For that reason we highly recommend motorcyclist’s have life insurance coverage in addition to their motorcycle insurance. Your loved ones will receive payments quickly in the event of your death, removing the anguish of not knowing how long their financial hardship needs to endured or if any payment will ultimately be received from the car insurance companies.

Whether you can only afford a small policy to cover funeral expenses (known as funeral expense insurance), or prefer to have  mortgage life insurance to cover for loss of earnings, there is a plan for you.

There are a range of life insurance policies to choose from depending on your circumstances. More mature riders might consider whole life insurance. Riders with young families and changing circumstances might consider term life insurance. If you have a pre-existing medical condition no-medical life insurance might be your best best. Either way we recommend talking to a Windsor life insurance advisor such as ourselves prior to making a decision.



Preferred Life Insurance – What is it, how do I qualify?

If you are reading this and want to learn more about preferred life insurance the chances are you are in good shape and lead a healthy lifestyle. preferred life insurance for the ultra healthyLife insurance companies rate customers by how likely they are to die at a younger age using statistics. Standard is the most common rate. Preferred rate is achieved only by a select few.

At the time you apply for life insurance you can ask to be assessed for preferred rates and will typically undergo a slightly more detailed medical exam. If you meet the insurance companies criteria you will be quoted a lower rate for your life insurance.

What to avoid

Unscrupulous life insurance agents have been known to quote ultra-healthy or preferred rates without even meeting the person, thus making their rates look artificially attractive. They do this in the full knowledge that most people do not qualify for ultra healthy rates,  in the hope they can convince you to buy life insurance at their standard rate.

How do I qualify?

In order to qualify for preferred rates you must be in excellent overall health and cannot use any tobacco products. You cannot have a history of drug or alcohol abuse or engage in any hazardous activities.  Only those statistically likely to live the longest will be offered the best rates.

What about No Medical Life insurance?

You may have heard of something called no medical life insurance. No medical life insurance is the wrong thing for you to consider if you think you might qualify for preferred . No medical life insurance premiums are higher in exchange for not requiring a medical exam. If you have a medical condition no medical life insurance is a good choice.

If you want to learn more about preferred life insurance we recommend you talk to a life insurance broker.

What can I do if I have been declined Life Insurance?

mother and daughter

A lot of people think they are out of options when they are declined life insurance. Major insurance companies regularly decline people life insurance and people often come to us for advice. Typically this occurs because of something in your background that makes you a higher risk. Typically diabetes, obesity, a previous cancer diagnosis or alcoholism. Do not assume just because your current insurer won’t provide life insurance that you

mother and daughter

are no longer eligible for life insurance. Clients previously declined life insurance have obtained life insurance with our help.

In our region, Windsor and Southwestern Ontario, the risk of cancer is higher. Often due to

where people worked. While prior history of cancer will put you in a higher risk category it does not prevent you from obtaining life insurance.

Life Insurance Risk Factors

Less than 15% of applicants qualify for the best rates for life insurance. Insurance companies assess as “standard” anyone with average life expectancy ratings. They “rate” everyone else on the basis of various risk factors and increase premiums accordingly. Here are a few of the more common reasons for high risk life insurance.

1. Obesity: If your weight is considered high for your height and you have high blood pressure or diabetes, this is considered high risk.

2. Blood pressure: Uncontrolled blood pressure will typically trigger refusal of your application. You are more likely to be insured if your blood pressure is high, but controlled by medication.

3. Travel: An insurer may decline you if you plan to travel to a region it views as dangerous or unstable. You may be able to exclude your trip from the policy or start your policy once you get back.

4. Alcohol use: Three or four alcoholic drinks a day will probably increase your insurance cost. If you regularly drink large amounts of alcohol you may be declined.

5. Drug use: Use of illegal drugs such as cocaine, crack or heroin is usually a showstopper. Marijuana users are typically treated as smokers and pay twice the premiums of non-smokers.

6. Dangerous recreational activities: Scuba diving and bull riding are considered high risk, for example.  Insurance policies  are available for some high risk activities.

7. Careless driving or DUI: Careless driving or driving while impaired by drugs or alcohol can result in either declined life insurance or cancellation of an existing policy if you have a record.

Declined Life Insurance Options

If any of the above applies to you it may be possible to make lifestyle changes and secure life insurance when you have previously been denied. It may be necessary to supply proof.

If you think you are likely to be declined life insurance for other health related reasons we recommend you contact a life insurance broker that specializes in high risk life insurance. In addition to having access to insurers that cover your condition, options may include, no medical life insurance or funeral expense insurance.

Declined life insurance does not have to mean uninsurable.





What are the chances I will develop cancer?

most common forms of cancer in Canada

What are the chances I will develop cancer is a question we often get asked. Well, according to the latest report from the Canadian Cancer society nearly half of all Canadians will be diagnosed with Cancer in their lifetime, according to the Canadian Cancer Society 2017 report.

What are 4 most prevalent forms of cancer?

most common forms of cancer in Canada

Lung Cancer
Colorectal Cancer
Breast Cancer
Prostate Cancer

Most of us know a family member or friend that has suffered from one of the above forms of cancer.

What are the other significant findings from the Cancer Society report?

Cancer risk in Canada

The numbers are chilling, but it’s no all bad news. Survival rates are on the increase, typically 60%.

So what can I do about my increased chances of developing cancer?

Obviously the first step is follow the advice of the Canadian Cancer Society.
“Actions like quitting smoking, eating well, being physically active and practising sun safety, along with appropriate cancer screening tests, can go a long way to reducing your risk of getting cancer.”

Since you now have a better understanding of your chances of developing cancer it pays to have a plan to protect your loved ones financially in the event that the worst were to happen. For the reasons stated above Life Insurance should not be a luxury. Depending on your age and circumstances you might want to consider:

Term Life Insurance – the most popular, typically the cheapest and favoured by younger applicants because it takes into account a term of typically 10 years at a time. Learn more about Term life Insurance
Whole Life Insurance – provides the most peace of mind, covers the rest of your life and the cost stays the same throughout. Learn more about Whole Life Insurance
No Medical Life Insurance – favored by people that either have a pre-existing condition or prefer not to have a medical examination. Learn more about No Medical Life Insurance
Funeral Insurance – covers just only the most basic costs, such as funeral expenses. Learn more about Funeral Insurance

But the initial survival from cancer rate is 60%, do I still need insurance?

Most people are not able to continue working while being treated for cancer. If that happened to you, who would pay your bills? Luckily there are 2 types of insurance available to ensure your loved ones are covered financially in the event of you undergoing treatment for cancer.
Disability Insurance – provides a lump sum payment designed to cover expense while undergoing treatment. Learn more about Disability Insurance
Critical Illness Insurance – provide income replacement if you are unable to work due to illnesses such as cancer. Learn more about Critical Illness Insurance

If you have been diagnosed with cancer and have been declined life insurance by your current insurance company do not assume it is impossible for you to obtain life insurance. As licensed insurance brokers we have access to a wide range of specialist policies from a range of insurance companies and have in many cases secure life insurance policies for people that had previously been denied life insurance.

Now you know more about your chances of developing cancer, it makes sense to do something about it. The longer you wait the more expensive life insurance becomes.