How they differ
| Lender mortgage insurance | Personal term life | |
|---|---|---|
| Who is paid | The lender | Your named beneficiary |
| Benefit amount | Declines as the mortgage is paid down | Level amount you choose |
| Portability | Tied to that lender and mortgage | Stays with you if you switch lenders |
Why the difference matters
With lender mortgage insurance the payout goes to the lender to clear the loan, and the benefit shrinks over time even though the premium often does not. With personal term life, your family receives a level benefit and decides how to use it.
Which to choose
Many people use personal term life sized to cover the mortgage and more, because it is portable and the family controls the money. The right choice depends on your situation.
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Book my free review →Frequently asked questions
What is the difference between mortgage insurance and term life?
Lender mortgage insurance pays the lender a declining balance; personal term life pays your beneficiary a level amount you choose and control.
Is term life better than mortgage insurance?
Term life is often more flexible: it is portable, the benefit does not decline, and your family receives the money. The right choice depends on your situation.
Does mortgage insurance move if I change lenders?
No. Lender mortgage insurance is generally tied to that lender and mortgage, while a personal policy stays with you.
Can one term policy cover my mortgage and family needs?
Yes. Many people size a single term policy to cover the mortgage plus additional family needs.
This page is for general educational purposes only and does not constitute personalized financial, tax, legal or accounting advice. Figures, limits and coverage ranges are illustrative and change over time - verify current terms before acting. Insurance and registered-account eligibility is subject to underwriting and government rules. Compensation is disclosed in writing before any application is signed. Neelesh Kumar is a Licensed Life & Health Insurance Agent regulated by FSRA - verify at fsrao.ca. © 2026 Wealthready · FinanceWithNeelesh · Kitchener, Ontario.