Term coverage vs. life insurance
Clients can become confused as to what coverage they need – and needs change as we grow older. Should brokers encourage clients to revisit their existing policies?
Video transcript below:
Reporter: Your client has just purchased a home. But what happens if they should die? Who gets paid first, the bank or the family? It’s term coverage versus life insurance on the Big Picture.
Chris Karram, President of Safebridge
Chris Karram: You know it’s a great question because it’s definitely, for many people it’s just a matter of understanding the options and you know from my perspective, of course we do truly believe that a traditional term insurance product if used for the purpose of your mortgage, but by far is going to be the better product from a cost perspective, from a coverage product orientation perspective, there is no question term mortgage insurance is by far better than what you can really get through a group program or lender’s mortgage insurance plan.
I mean a basic comparison that we often will use when it comes to looking at term insurance versus mortgage insurance is really just the basic term 20. You know the simple fact is you got lower coverage for that 20 year period, your premium is not going to change on you and often times it comes out a lot cheaper for you than a mortgage insurance product. So you know when you look at the product benefits and you look if nothing else at the cost, you know it really does become somewhat of a no brainer considering that mortgage insurance does decrease in value and is part of a group product, so you really have no control or ownership over it anyway. So it’s a very obvious differentiation between the two, it’s just more a matter of the Canadian consumer taking a look at what their options actually are.
Reporter: Clients can become confused as to what coverage they need and needs change as we grow older. Should brokers encourage clients to revisit their existing policies?
Chris Karram: The biggest decision most Canadians will ever make is their mortgage and as a result we believe that reviewing your insurance program, reviewing your investment program, whether it’s term insurance or whole life insurance, and you know various combinations of the two, the fact is reviewing your entire financial situation is far more important at that stage in life than many others. So we by all means recommend you know a full review if nothing else, it’s definitely in the best interests of our clients.