Life Insurance versus Mortgage Insurance

Life Insurance versus Mortgage Insurance, is what some of my clients ask me when they are purchasing a house. A financial advisor I know in Ottawa shared with me a practical chart to explain the difference between life insurance and mortgage insurance:

PERSONAL LIFE INSURANCE MORTGAGE INSURANCE
  • Insures you
  • You decide who to name as your beneficiary
  • Renewable, convertible term insurance
  • Underwriting is done at the time of application
  • You determine the amount of the coverage; your coverage remains same
  • You own the policy
  • It is yours, you keep it
  • Your beneficiary decides how to use the money
    • Insures your mortgage
    • Lender is the beneficiary
    • Non-renewable, non-convertible term insurance
    • Underwriting is done at the time of the death
    • Covers the exact amount of mortgage balance; as you pay down your mortgage your coverage decreases but your premiums remain same; cost per $1000 of coverage increases
    • Lender owns the policy
    • When you change your lender you cannot transfer your insurance
    • Lender automatically pays remaining mortgage balance
    • Shared by Nilay Erisoglu, Financial Security Advisor, Freedom 55 Financial Nilay.erisoglu@f55f.com

Let me go through some more details of Life Insurance versus Mortgage Insurance

Life Insurance

Mainly life insurance is used for insuring yourself, you decide who you name as the beneficiary (your spouse, family member, etc) and they decide on how to use the money, the amount of money paid out to the beneficiary never changes.

Life insurance is also renewable, and convertible term insurance. In Life insurance you have protection for the duration of the policy. The duration usually is around 10 to 30 years or sometimes to an age like 70 or 80. It all depends on the term you purchase and the underwriting is done at the time of the application.

In life Insurance you determine the amount of the coverage; your coverage remains same during the policy. When you plan to sell or change lender for you mortgage, your life insurance remains the same and does not get affected, it stays with you.

Life insurance is usually less expensive than mortgage insurance. Although a note of caution that if you intend to get for another term, you could potentially be paying a higher premium depending on the age and your health. Typical the enrollment process for term life insurance is more complex than applying for mortgage insurance, since life insurance policies require a medical exam in order to secure coverage.

Mortgage Insurance

Mortgage Insurance insures your mortgage, and the lender is the beneficiary (not someone whom you have named). It is non-renewable, and it is non-convertible term insurance. Typically the underwriting is done at the time of the death. Mortgage insurance covers the exact amount of mortgage balance; as you pay down your mortgage, your coverage decreases but your premiums remain same…

In Mortgage Insurance the lender owns the policy and if you change your lender you cannot transfer your insurance to the new property. The lender automatically pays remaining mortgage balance in the case of death.

Some advantages of mortgage insurance are that they are very convenient, they often do not require any medical exam. You typically will purchase the insurance through your bank or the financial institute that lend the money for your mortgage. Mortgage insurance is usually added to the lender’s monthly mortgage payments.

The downside of mortgage insurance is they are usually more expensive than life insurance although more easy to attain from a bank. CBC Marketplace also did a series of mortgage insurance.

I hope this blog post helps explain the difference between Life insurance versus Mortgage insurance and last but not least I hope your winter is going well with a lot of fresh air experiences and you are getting ready for a wonderful spring coming up with high energy.,..Whether your plans to relocate, to downsize, to aim for a change or investment, give me a shout and lets get the ball rolling for your next chapter…

Cheers!

Written by Nilay Ertemur

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Hello Katimavik Hazeldean neighbors, friends, parents of Castlefrank and and Katimavik Schools, here are some updates on Katimavik Hazeldean Community News.

I would like to inform you on upcoming projects and festivities in our community so that you can enjoy them, make use out of them, be part of the great community we all live in, and prepare ourselves for some upcoming projects.
As you might have already received a newsletter in your mailbox, the City of Ottawa is constructing a new pump station and forcemain along Maple Grove Road, Terry Fox Drive, Katimavik Road and Eagleson Road. The newsletter states that the forcemain route on Katimavik Road includes rock that requires excavation. As a result, some construction work will be performed including blasting. The work will be conducted with an approved blasting plan that meets City of Ottawa requirements. Blasting is projected to begin the week of May 10, 2016 for approximately 18 weeks through to the end of September 2016. Blasting will not take place on Sundays and statutory holidays and the times of the operation is between 7 am- 10 pm. For more information: City Project Manager, Steven Stoddard, steven.stoddard@ottawa.ca tel: 613 866-7023.

On a pleasant note, the community has some great events coming up. On Wednesday, June 8 2016 at Katimavik School,

Castlefrank Elementary School Council and Katimavik Elementary School Council have CES/KES Community Festival.

You can come and enjoy the fun, food and FREE entertainment!

BBQ by Katimavik Hazeldean Community Association on June 4 starts at 12:00 noon and goes till 3 pm at Castlefrank Elementary School and it includes oriental children games, musicians, and dancers…

Katimavik Hazeldean Community Association has also a Community Yard Sale on June 4 from 8:00 am to 12:00 noon at your houses!

I am involved in our community and would like to invite you to come, join and be a voice for the things that matter!

Have a happy spring and summer, get out and get involved in your community, wherever it may be…
Cheers!

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The old man winter is coming soon, and since the weather has changed in early September here in Ottawa, most people are probably thinking (although one does not want to) about ways to winterize their homes.

Here are 10 tips to get your home ready for the winter:

1. Clean your gutters
September onward would be the best time to clean up all the tree branches, leaves or toys that are stuck in the gutters. You do not want the fall rain to be draining towards your house, you want it away from your foundation, having them cleared for rain/water flow would benefit any home. If you have a tree that sheds it’s leaves late in fall, you may wish to do this later in the season.

2. Replace your furnace filter
Most of us forget about replacing our furnace filters (which causes us to reach the furnace company for a service call only for them to advise us to change our filter and the furnace works just fine again) they do get dusty over the summer even though your furnace may not be running that much (remember it still runs if you have an air conditioning unit), replace your filter and mark the date on your calendar so that you know when the filter was last changed.

3. Caulk any gaps at windows or doors
Caulking is one of the cheapest solutions to block draft air coming into your home. The process is by simply moving your hand around the edges of your door and windows and find out if there is any air coming in. Caulk around where you feel the draft, don’t forget the attic door, and your laundry dryer vent might need caulking as well.

4. Check door and garage door weatherstripping
Check the main entrance door weatherstripping, if its damaged, replace it and also the weatherstripping for the door that enters your house through the garage. There is weather stripping for your outside garage doors that one can purchase from Lowes or Home Depot. Having garage door sealers/weatherstrips adds an extra layer or blockage of wind and breeze, thus it keeps your garage and house warmer.

5. Insulate electrical outlets and switches
Most people may not realize that electrical outlets also bring in some draft air into houses, and one can purchase a simple styrofoam socket sealer from Home Depot or Lowes. Remember when working with electricity, one has to turn it off from the main electrical panel before starting to unscrew any socket.

6. Add attic insulation
Houses lose most heat through the roof/attic, I have an article of how to insulate your attic, and it does really help in warming your house when you increase your attic insulation!

7. Reverse your ceiling fan
Most people think of using their ceiling fans only in summer, but in winter if you reverse the rotation (i.e running clockwise) it will bring back the warm air from the ceiling back down to be recirculated.

8. Wrap those pipes
Turn off those outside water sprinklers or faucets so that you don’t get your pipe frozen and end up with unpleasant insurance claims and flooding problems , turn them off from the inside if you can access them, also get pre-molded pipe sleeves to wrap up any hot water pipe so that less heat is lost through them for your hot water tank.

9. Get a programmable thermostat
If you are still using a non-programmable thermostat, go and obtain one that you can program, it will save you money. Hydro Ottawa peak saver plus runs a free program to get free thermostat till the end of September 2014.

10. Seal up any ducts
The ducts that run around your house can also be sealed up with aluminum foil tape, if you find/reach any heating duct, check if there is any leakage around them, usually leakage is found around the joints. Use your hands to feel if there is any breeze, and put some extra tape to seal it up.

And remember to enjoy winter, it will not last forever…

Author: Nilay Ertemur

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