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Frequently Asked Questions
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Question:
What happens to my mortgage life insurance when I renew my mortgage?
Answer:
What happens in this situation depends on the terms of the original insurance certificate you received when you purchased your mortgage life insurance.
If you decide to renew your mortgage with the same lender, on the same terms (except for the interest rate), you may not have to apply for new life insurance coverage. Depending on the type of insurance coverage you have on your existing mortgage, the amount of your premium may change when you renew your mortgage. If you increase the amount of your mortgage, you may have to fill out a new mortgage life insurance application. Keep in mind that different insurers have different maximum coverage limits. You should also be aware that, if you move your mortgage to another financial institution, this cancels any existing insurance you purchased with the original lender. You can buy new insurance from the new lender, but you are free to get it from any insurance company.
Some insurers now offer a portable product, which allows you to carry your insurance coverage with you, even if you change lending institutions.
Resource(s):
Classification of this FAQ:
| Category | Sub-category |
|---|---|
| Insurance | Renewing |
| Mortgages | Renewing & Renegotiating |
| Insurance |
Related Question(s):
- What is a “portable” mortgage?
- Can my bank force me to open an RRSP account with them or transfer my existing RRSP account as a condition for receiving an RRSP loan (coercive tied selling)?
- What's the difference between coercive tied selling and beneficial tied selling?
- How is mortgage life insurance different from term or permanent life insurance?
- What is an “assumable” mortgage?
- Do I have to list the mortgage lender or finance company as a beneficiary on my home or auto insurance policy?
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