I had coffee with an old friend a few weeks ago that I hadn’t seen in 24 or 25 years. I had intended to stay in touch, but like most people, life gets complicated with our jobs, children and other commitments, and without the benefit of social media like we have today, it was easy to lose track of him. Graham found me on social media and we finally met for a very long overdue coffee.

Graham was always ready to help anyone he met without any strings attached. I remember telling him about a children’s Christmas party I was organizing for a company I managed at the time, and he immediately offered to do a magic show for the kids. My son Ian was probably 12 years old at the time, and he still remembers the magic show, as I’m sure other children who where there do, and that was a very long time ago.

Some people never change, and certainly not Graham. He wanted to add value to my clients and I, so he offered to send me a few articles he has written. Below is one such article worth reading, and if you have any questions, please call him directly. He has also written an interesting book which I will be offering in “e-book” format sometime soon.

Bank Mortgage Insurance or Life Insurance?

A bank insurance policy, sometimes called “creditor protection”, and an individual / personal insurance policy recommended by an insurance advisor are quite different. It is in the client’s best interest to seek advice from an insurance advisor than accepting the bank’s insurance policy while signing mortgage documents.

The major difference from the bank insurance is that the underwriting is done when a claim is made which could put the beneficiary at risk of not receiving the benefit at death. The bank is automatically the beneficiary on their policies while the individual can name the beneficiary for their personal / individual policies.  In simple terms: the bank’s policy is approved without doing a full review of your personal health which they do if a claim is made and at that point, they could deny the claim. With an insurance policy through an insurance advisor, the personal health is reviewed before they provide the policy. This is the part called underwriting. The beneficiary is the person you want to receive the death benefit if you pass.

Another major factor is that an individual policy may provide a lower premium cost as it is based upon medical underwriting where an individual may receive lower premiums for being very healthy. (The premiums are what you pay per month or annually to have the insurance coverage). That may not apply with the bank creditor insurance as the qualifying factors are usually only 5 questions with no medical underwriting. Personal policies can also be shopped around by the insurance advisor for competitive pricing. In addition, the banks charge the premium for the length of the mortgage and the mortgage declines in value over time, but the premium doesn’t! With individual / personal policies, the premium stays level and the insured amount stays level!

                                                                                Individual / Personal Policy            Bank Policy

Own & Control Your Life Insurance Policy                         Yes                                             No

Level Life Insurance Amount Coverage                             Yes                                             No

Choose Your Beneficiary                                                   Yes                                              No

Two Death Benefits                                                           Yes                                              No

A Portable Life Insurance Policy                                       Yes                                              Maybe

Underwriting at Time of Application                             Yes                                               No

Preferred Rates for Good Health                                   Yes                                              No

Life Insurance Premium is PST Exempt                           Yes                                               No

Continue Life Policy after Mortgage is Paid                      Yes                                              No

Guaranteed Life Insurance Premium Rates                     Yes                                               No

Ongoing Service from Broker/Agent                                 Yes                                               No

Life Insurance Price Comparison                                      Yes                                              No

Conversion to a Permanent Life Insurance Plan              Yes                                               No

Insure all Your Life Insurance Needs with One Policy      Yes                                               No

After reviewing a client’s needs, the insurance advisor will provide a client with a recommendation on what the client truly needs and what they can afford.

Prepared by Graham McWaters of CWF Group,  March 2020, For further info contact Graham at:

416-809-2130 or graham.mcwaters@cwfgroup.com

Pin It on Pinterest