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GLOSSARY

Canadian Financial, Real Estate and Mortgage Glossary

How often this word is used
 
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50% - Moderately

Declining Life Insurance


Synonyms:mortgage life insurance
Filed Under: financial-banking, insurance, mortgages
Tags: banking, insurance, mortgage
 

Definition of declining life insurance

declining life insurance
1. A life insurance policy where the death benefit slowly decreases over time. A declining life insurance policy is a viable option to insure a mortgage; as the amount owed on the mortgage decreases, so does the size of the death benefit, and insurance premiums.

Related Terms and Acronyms:

  • Canada Mortgage and Housing Corporation (CMHC)   The Canada Mortgage and Housing Corporation: this is a Federally run institution that provides banks and lenders with mortgage insurance. Not to be confused with life or property insurance. In the event of default or foreclosure CMHC assumes responsibility of the property and reimburses the bank/lender the entire mortgage amount. This insurance is required generally when you have less than 25% equity or down payment. This insurance is paid by the property owner in advance but usually added to the mortgage amount. See also "G.E. Capital."
      ➥  Insures Canadian mortgage lenders.
  • death benefit (DB)   A payment or series of payments made to the beneficiaries of a life insurance policy.
      ➥  An amount paid to a beneficiary in a life linsurance policy.
  • insurance (insur)   An arrangement where one party provides financial protection to another party for specific damages or losses.
  • life insurance   An arrangement where an insurer agrees to pay a benefit to one or more beneficiaries in the event of the policyholder's death.
      ➥  CanEquity offers life insurance.
  • mortgage (mtg)   A mortgage is a contract stipulating a specific real property, typically a residence or building, as collateral for a loan. The mortgage incurs a rate of interest that varies according to term and other features.
  • mortgage disability insurance   Insurance that covers mortgage payments if a policyholder becomes disabled.
  • mortgage insurance   Insurance that protects a lender if a homeowner fails to pay off his or her mortgage.
      ➥  CanEquity offers mortgage insurance.
  • mortgage life insurance   Insurance that covers the costs of paying off a mortgage if the insured dies or becomes disabled.
  • premium   A payment made to an insurance company for insurance coverage.

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