A.T. Financial Newsletter
Thinking about mortgage
life insurance?
Many Canadians are prompted to buy mortgage life insurance when they buy a home, aiming to protect what is often their largest investment. It's important to know, however, that the purchase of mortgage life insurance is not compulsory. In addition, there may be a better way to protect your family and your home - with term life insurance.

Mortgage life vs. term life
Mortgage lenders typically offer mortgage life insurance, also known as creditor insurance, as an add-on service when customers finance their homes. It's a convenient way to protect your family in case anything happens to you.

Mortgage life insurance covers the repayment of the outstanding mortgage balance upon death (limitations may apply), making your creditor the sole beneciary and freeing your dependents from obligations. Term life insurance, however, may provide you with the same protection along with more flexibility and be more cost-effective:

With a term life insurance policy, you get to choose your beneciary, who can then choose how to best use the insurance proceeds - including paying off mortgage debt as well as paying off any of your other debts, meeting day-to-day living expenses, or paying your final taxes.

A term life insurance plan covers you for a fixed amount, while mortgage insurance only covers you for the outstanding mortgage balance, which declines as you pay off the loan. In practice, this means mortgage life insurance
protection actually shrinks as you build up more equity in your home

Mortgage life insurance generally covers only the individual listed on the loan document. In contrast, some term life insurance and critical illness insurance policies extend coverage to you, your partner, your children, and others.

If you switch mortgage lenders, you may lose your insurance coverage and have to reapply. Term life insurance, on the other hand, is portable. Your coverage stays with you, no matter who your lenders are.

Under a term insurance policy, certain conditions such as the type of coverage and the amount covered can be fairly easy to change. You even have the option of converting to permanent insurance, which covers you for life.

Assess all coverage
If you're buying a new home, it may be an ideal time to review and re-evaluate all your income protection needs, particularly if you have a growing family or are taking on bigger financial obligations.

You could use the opportunity to look at your current insurance coverage, and that of your spouse, to reduce any duplication and determine the right amount of protection needed in the case of death or illness - whether it's to help pay off a mortgage or anything else that's important to you.

Insurance planning is a key component of your overall financial plan. We can help you make the decisions that are right for you and your family.
Life insurance calls
for a personal touch
While Canadians buy nearly $19 billion in goods and services online, one product that has fared less well on the Internet is the sale of life insurance, where most buyers seem to prefer a personal touch. A recent survey by the Life Insurance Market Research Association (LIMRA) indicates that 76% of Canadians prefer to buy life insurance face-to-face.1

Why is this? Probably because life insurance is typically a personal, highly customized product. Your employment conditions, financial situation, family obligations and life expectancies are unique. This means life insurance advice may be diffcult to dispense via a call center operator or based on an online checklist.

The LIMRA study measured long-term patterns in life insurance ownership, adequacy of coverage and consumers' attitudes about insurance. For example, it found that demand for insurance remains high, even though just over two-thirds (68%) of Canadian households have life insurance. In fact, six million Canadians believe that they need more.

In many cases they are right. Married couples with children under 18 were found to have less insurance coverage than they may need for their protection. Three out of four people surveyed said they would have trouble meeting current expenses if the family's primary wage earner were to pass away.

Do you have enough insurance to provide your family with the protection you want them to have? Talk to us to make sure. And, judging from the survey results, you may prefer to chat in person, rather than text, tweet or email - which is fine by us.
1 LIMRA, 2013 Canadian Life Insurance Ownership Study
For more information,
please contact us at

(647) 833-2782