Common Misconceptions Around Term Insurance

One question we get asked a lot at Broker Plus Insurance is about how Term insurance differs from traditional Mortgage insurance. A lot of times, clients can get overwhelmed when they are taking out a mortgage, especially if it is their first mortgage. They may feel rushed into making a decision or decide not to take any coverage which results in them not making a sound decision about which coverage is best for their family and themselves or not having any coverage when something horrible happens. With a lot of “fake news” out there, we wanted to try to clear a few things up about some of the common misconceptions surrounding term insurance.

Misconception #1 – Term insurance is not portable:  
The main benefit of Term insurance is that it is portable from lender to lender, property to property, unlike traditional Mortgage insurance. All of the policies we offer at Broker Plus Insurance are fully portable (and sometimes convertible) you can rest assured that if they move or if your needs change you can be confident that your insurance will have some flexibility as opposed to if you had taken insurance through the bank.

Misconception #2 – You can’t choose your beneficiary:
Another massive benefit of Term insurance is that the life insured can select their beneficiary who will receive the value of their policy if they die. While traditional Mortgage insurance will pay the lender so that the mortgage is paid off the benefit of Term insurance is that the funds could be used for things other than the mortgage such as childcare costs, funeral expenses and whatever else your beneficiary chooses to do with the money.

Misconception #3 – Term insurance declines as the mortgage is paid off:
Term insurance DOES NOT decline in amount unlike Mortgage insurance; if you want $500,000 coverage, they will have that $500,000 for the entire time the policy is in place. If you had $300,000 owing on their mortgage when they passed away their beneficiary would still receive $200,000 assuming they used $300,000 to pay off the remaining mortgage.

Misconception #4 – Term insurance is only for short term:
At Broker Plus Insurance, we are proud to offer Terms of 10, 20, 30 and even 100 years!  Locking in for the most extended term your budget will allow is always a smart move. While 10-year term premiums look attractive up front, the new higher premium every 10 years is NOT. We will explain the ins and outs of term insurance to you so that you can compare it with mortgage insurance and make the best decision!
Don’t be led astray by “fake news” contact Broker Plus Insurance today! We promise to make your insurance needs come true, on your terms.

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