As we get older, we realize that having insurance is part of a sound financial plan. When we start businesses, get married, or start a family, we begin to think about our loved ones and how a sudden passing would impact them financially.

Protecting your family means having an insurance plan that is cost effective now, while ensuring your family is well compensated in the event of an untimely death Debt from a mortgage and other expenses can be crippling for a family that is unprepared.

If your family depends on you for financial support, it’s good to think about more than just your mortgage. While a mortgage is likely your biggest debt, leaving enough money behind for other expenses like funeral costs, living costs, and moving costs, is important too. There might be other outstanding debts such as car loans, or credit cards to pay off. If you are a family with young kids, you also need to ensure your spouse is covered for the day-to-day expenses they may not be able to otherwise handle, such as cleaning, cooking and day-care.

This is why choosing the right insurance policy is extremely important. Credit-life insurance through the bank might seem like protection for your family, but if you look a little closer at their policies, you will see why a mortgage-life policy through an independent agent is the better choice.

One big advantage of a mortgage-life policy is that it puts you (and your family) in control of your finances. If you die, you want your family to benefit directly from the claim, not the bank. Mortgage life insurance allows your family to decide where and how the money is spent.

Credit-life insurance through the bank is designed only to protect the bank’s investment and nothing else. They both own the policy and are the sole beneficiary of any funds paid out. Yes, your family will be free of mortgage debt, but often there are more immediate expenses to take care of. Choosing where funds are needed most should be left up to your family, not the bank.

The bank owned credit-life coverage also decreases as you pay your mortgage down. If you have a 300k policy and pay off 160k at the time of death, your payout is only 140k. Alternatively, a broker supplied mortgage-life insurance policy will hold its value for the entire term. A 300k policy pays 300k no matter how much of your mortgage has been paid. That means if your family chose to, they could take 160k to pay off the remaining mortgage and still have 140k to spend elsewhere. That is 140k that you are not entitled to through bank-owned insurance.

Insurance is a great tool to use when it works for you and your family. If you’re not sure you have sufficient coverage, a trained and independent advisor will be able to help you to choose the right policy the first time.