Mortgage insurance is an insurance which an individual buy when he took mortgage from the bank and he does not have sufficient insurance in place to cover his mortgage. The purpose of this insurance is to provide help in paying off the mortgage balance if an individual die or suffer from any serious illness or disability.

There are two ways to buy mortgage insurance and it is very important to understand the difference when making a choice.

Bank Mortgage Insurance

1. • It is easier to get because no questions being asked. All medical history and underwriting done at the time of claim which many times result in claim being denied.
   • Bank is the beneficiary and not the family at time of claim.
   • Generally do not have many plans (e.g.whole life insurance) to choose from when buying insurance.
   • Bank pay only the mortgage balance in death claim and not the amount one purchase at first place.
   • It has to be renewed every time one renew the mortgage which is generally 5 years.

Insurance Company Mortgage Insurance

1. 1. • In simple words, it is same like term insurance with the option of adding critical illness and disability insurance.
      • Like any other insurance, underwriting and medical questions are asked at time of application submitted.
      • Your family mentioned at time of application is the beneficiary for your insurance.
      • Insurance company will pay the insurance amount purchased at the time of application and not the balanced mortgage amount.
      • There are many insurance plans available to choose from.