Mortgage insurance typically gets set up when you start/renew a mortgage with a financial institution. The concept makes sense, which is why I see these policies all the time. “If the worst were to happen, the insurer would pay off your mortgage, so your family doesn’t have to”.

However, these policies have some major downside risks that are sometimes not communicated:

1. They don’t transfer:
   1. i.e. if you move your mortgage to another lender after your term is up, the insurance doesn’t go with you.
       
2. They typically are significantly more expensive:
   1. Most policies use a blended, smoker/non-smoker rate. So if you don’t smoke and have this coverage, you are almost certainly overpaying.
       
3. Lastly, the value of the policy decreases over time:
   1. As you do a good job paying down your mortgage, you get less of a benefit, yet you still pay the same price.

Not to sound liike Geico, but if you have mortgage insurance, we need to have a quick 5 minute conversation. Doing so, could save you a bunch of money :). Over the last 10 cases I've seen, the average savings were over $1000 a year. I always say better in your pocket vs. someone elses. 

Send me an email at gary.weatherup@rbc.com or you can book a call at a time that works for you at: https://go.oncehub.com/Gary_Weatherup.

Stay safe,
Gary

Gary J. Weatherup, CFP
Certified Financial Planner
Finucci Janitis Wealth Management Group
(519) 675-2021
gary.weatherup@rbc.com

This information is not investment advice and should be used only in conjunction with a discussion with your RBC Dominion Securities Inc. Investment Advisor. This will ensure that your own circumstances have been considered properly and that action is taken on the latest available information. The information contained herein has been obtained from sources believed to be reliable at the time obtained but neither RBC Dominion Securities Inc. nor its employees, agents, or information suppliers can guarantee its accuracy or completeness. This report is not and under no circumstances is to be construed as an offer to sell or the solicitation of an offer to buy any securities. This report is furnished on the basis and understanding that neither RBC Dominion Securities Inc. nor its employees, agents, or information suppliers is to be under any responsibility or liability whatsoever in respect thereof. The inventories of RBC Dominion Securities Inc. may from time to time include securities mentioned herein. RBC Dominion Securities Inc.* and Royal Bank of Canada are separate corporate entities which are affiliated. *Member-Canadian Investor Protection Fund. RBC Dominion Securities Inc. is a member company of RBC Wealth Management, a business segment of Royal Bank of Canada. ®Registered trademarks of Royal Bank of Canada. Used under license. © 2020 RBC Dominion Securities Inc. All rights reserved.