Getting the right combination of insurance coverage is important to protect your family - and you want to do that without being over-insured. Something you should think about is whether your family would have the financial support they need to stay in their current home if something were to happen to you.
So, when it comes to protecting your family home there are a couple of options, mortgage insurance or life insurance.
Mortgage insurance pays down the balance of your mortgage if something should happen to you. As a mortgage is typically the biggest financial debt for a family, this can ease a significant financial burden for your surviving spouse.
Life insurance is different. It provides a lump-sum payment to your beneficiaries if something should happen to you. You determine the amount of life insurance you will need when you purchase your life insurance policy.
How that lump-sum payment is used is entirely up to you. Some people choose to use it against their mortgage and any other debts. Some choose to use it to replace the income that is no longer there, while continuing to pay off the mortgage on their own.
Mortgage insurance, life insurance or a combination of both can certainly provide financial support to help keep your family home.
Finding the right combination of insurance coverage to match your financial goals, without being over-insured may seem challenging, that's why we suggest consulting a licensed insurance advisor. They can help you understand the right type of insurance and the amount of coverage you need, plus answer any questions you may have.
Read more at the RBC Advice Centre.
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