Three Sixty Financial Group serving Port Moody, Coquitlam and Vancouver Area
  • Home
  • About
    • Blog
    • Contact
    • Ruben's Shoes
    • Testimonials
    • Videos
  • Client Service
    • Business Insurance >
      • Buy/Sell Insurance
      • Business Overhead Expense Insurance
      • Corporately Owned/Shared Life Insurance
      • Group Critical Illness Insurance
      • Key Person Insurance
    • Charitable Giving
    • Critical Illness Insurance
    • Disability Insurance
    • Employee Group Benefits
    • Health & Dental Insurance >
      • Private Health Services Plan/Health & Welfare Trust
    • Home Insurance
    • Life Insurance
    • Long Term Care Insurance
    • Mortgage Services
    • Mortgage Insurance
    • Travel Insurance
  • Employee Benefits
  • Super Visa Insurance
  • Travel Insurance
  • BOOK APPOINTMENT

Do you Rent or Own your Mortgage Life Insurance?

3/21/2017

0 Comments

 
Buying a home and getting a mortgage can be an overwhelming process. With insurance planning being left to the end, many people do not take the time to get a comprehensive life insurance plan in place and end up paying more than they should for basic mortgage insurance or even worse, they opt out of mortgage insurance all together (this is bad!). 

If you are paying for mortgage insurance through a mortgage insurance plan or an insurance plan from your bank/lender, you do not have the best plan in place and you need to get in touch with a licensed Insurance Advisor to review your situation and put together a comprehensive insurance plan that suits your needs and protects your family and loved ones.

Once you move from a mortgage insurance product to a personally owned life insurance plan, you will learn that there are two options when it comes to life insurance; Term Insurance and Permanent Insurance. 

Term Insurance VS Permanent Insurance

Term insurance makes the most sense to cover a high need for specific period of time, like a mortgage. When you have a mortgage, you need a significant amount of life insurance in place, generally for at least 10-20 years, while your mortgage debt is being paid off. Many people with a large mortgage also have a young family with a spouse and children that depend on their income which is why a comprehensive life insurance plan is needed. 

Term insurance is comparable to renting. 

When you have a term life insurance policy, you have insurance coverage in place while you need it but once the coverage period (term) ends, you walk away from the policy and you have no equity or anything to show for the money you have paid into the policy.

Permanent insurance is best for long-term planning. Eventually life ends for all of us and there are expenses and taxes that will be owed. Life insurance is needed to help pay for these final expenses, especially if you will have significant assets in your estate that will trigger a large bill to CRA to cover taxes owed from Capital Gains.

Permanent insurance is comparable to owning.

When you own a permanent life insurance policy, the policy builds up equity through its cash value and can be completely paid up in 20 years (similar to owning a home). 

Permanent life insurance coverage is guaranteed for life and the premium you pay is also guaranteed for the payment period of the policy, typically for 20 years. After that 20 years, the policy is fully paid up and there are no more premiums to be paid. Hence, you own the policy and you have an asset that has built up equity.

Rates for term insurance start off low and gradually increase over time until they become essentially cost prohibitive in your 60/70s. With Permanent insurance, the rates start off higher, but they do not change and after a certain period of time the payment ends and you own the policy for life. If you can make it work in your budget, we generally recommend a combination of both Term insurance and Permanent Insurance to cover your short term and long term needs.

By combining the two types of insurance, you get the most bang for your buck and you have the insurance protection you need to cover your mortgage, your income, and all of your other daily living expenses while your are young and your expenses are high. After 20 years, the term insurance falls off and you are left with your permanent life insurance policy that is paid up for life, continues to grow, and is guaranteed to pay out.

If you would like to review your situation, please contact me desiree@threesixtyfg.ca.
0 Comments

    Archives

    July 2017
    June 2017
    March 2017
    February 2017
    January 2017
    July 2016
    April 2016
    February 2016
    January 2016
    November 2015
    October 2015
    August 2015
    July 2015
    May 2015
    April 2015
    March 2015
    January 2015
    November 2014
    October 2014
    September 2014
    August 2014
    July 2014

    Categories

    All
    Critical Illness Insurance
    Extended Health And Dental
    How To Get Your Company To Pay For Your Child’s Braces
    Life Insurance
    Life Insurance For Corporate Planning
    RRSP Vs Life Insurance
    Tax Planning
    Top 5 Ways To Spend The Refund From Your Critical Illness Insurance Policy
    Tri-City A-LIST!
    Visa Medical Insurance
    What Is Life Insurance?
    What Is Whole Life Life Insurance
    Whole Life Insurance

    RSS Feed

Book An Appointment
Picture

778 245 2262

Get Social with us!

Read Our Blog
Picture

©2017 All Rights Reserved  l  Three Sixty Financial Group 


Website powered & design by EGAMI Creative Group