The convenience that Toronto mortgage insurance offered by banks/lending institutions comes with a cost. For one thing, it’s typically more expensive than life insurance. Sometimes quite a bit more. Plus, while your premium remains the same as long as you’re insured, the potential pay out diminishes as you near the end of your mortgage. In addition to that, your policy must be renewed every time you renew your mortgage or switch lenders.

The most concerning thing about creditor insurance offered by your lender is these polices, are not technically approved and will only be underwritten (approved or declined) after there has been a death.

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Life Insurance has always been there to handle the “What ifs” in life. You pay a monthly premium to the insurance company and they in turn take on the risk by agreeing to pay an agreed upon, tax free, lump sum in the event the unexpected happens.

It is important that a household – especially those who still have young children to have a solid life insurance plan in place whether you live in a big city like Toronto or a small town. What kind of insurance is best for you and your family?

There are basically two types of life insurance policies: term life insurance and permanent life insurance. Term policies are usually the more popular option compared to its more expensive counterpart, but there’s more to it than meets the eye:

1. Price. It is true that term life is cheaper than permanent life in terms of monthly payments. However, it is also noteworthy to mention that the premium of permanent life is fixed and premiums will never increase, while term life increases with every renewal.
2. Time. Term life policies usually last only for a defined period of time, such as 10 years; while permanent life is, well, permanent. The perfect life insurance policy depends on many factors like budget, how long the client wants to keep the policy and what purpose the life insurance is being used for.

These two types of life insurance, although different both provide peace of mind for the policyholder and the beneficiaries. While it is important to note that term life policies can be converted to permanent life at any time without evidence of insurability (no medical questions), age does play a factor in the monthly premium when converted. It pays to choose carefully.