Is it better (for homeowners) to buy Life Insurance instead of Mortgage Insurance when taking out a mortgage?

It doesn't make sense to me that Mortgage Insurance only pays you the mortgage amount left at time of death, while your premiums remain constant, unlike Life Insurance which pays the full benefit taken out originally.Is it better (for homeowners) to buy Life Insurance instead of Mortgage Insurance when taking out a mortgage?
Mortgage insurnance (AKA Creditor insurance) is a terrible product. It's been proven time and time again that purchasing individual term life insurance beats creditor insurance hands down everry time.





Here are a couple of the key points:





As you mentioned the coverage declines since you are only covering the balance. However the cost of the insurance doesn't! Creditor insurance gradually gets more and more expensive EVERY payment you make. Keep in mind that this is the same case with any type of debt insurance (credit card insurnaces, loan insurances, line of credit insurnaces, etc)





The bank owns creditor insurance, not you. IF they decide to cancel or change your insurance they can do it and you have no say. With a term insurance contract the company can't change anything.





Which Creditor insurance, it only pays the mortgage. One Question: What if the mortgage isn't the biggest concern? How are you going to pay the funeral expenses? The power bills? etc? Oh, wait...you just paid off your mortgage...the bank will just lend you more....the bank continues to make money from you...it just moves from a mortgage to a line of credit.





HUGE point: The underwritting. Creditor insurance is underwritten (the process in which they decide if you are eligible to make a claim) is done at the time of claim. What that means is that you can pay into the insurance for decades and still get declined quite easily and get no money back. (See the CBC Marketplace link below) Term insurance does the underwritting at the time of application, so you know you are eligible or not before you even pay the first premium.





Rather than a lengthly long post here are some links that compare the differences including some independent news reports comparing them:








http://www.conservest.ca/Term-Insurance-鈥?/a>





http://www.cbc.ca/marketplace/in_denial/





http://www.sunlife.ca/plan/v/index.jsp?v鈥?/a>





http://www.asset-aid.com/bank_vs.htmlIs it better (for homeowners) to buy Life Insurance instead of Mortgage Insurance when taking out a mortgage?
Life insurance is 100% better way to go!