What is Mortgage Insurance (aka mortgage life/disability insurance) This insurance is different than Mortgage Loan Insurance (which insures the lender from the loan defaulting). Mortgage Life Insurance is to ensure your family has enough money to cover the mortgage liability in case of your untimely passing. The most important points are that the bank insurance is sold by a bank employee, not a licensed insurance professional and the coverage through the bank is post-claim underwritten (meaning that your medical file is not reviewed until after you die) vs. pre-claim underwritten (your medical details are reviewed at application). The bank insurance may cover your mortgage payment only in case of disability/illness/job loss which is why many people choose individual insurance which pays you directly - not the bank. Which insurance you need (life, disability or critical illness insurance) depends on your situation - whether you have dependents, are single, have substantial assets, etc.