EchoBase posted:

I'm looking into life insurance and wanted to get some advice. I'm in Canada in case it matters. We recently bought a condo and are also having a baby in the fall. My wife works now and will continue to work after her maternity leave.

When deciding on an amount of insurance, I understand the standard calculations of how much debt you want to be able to cover, how much income you want to replace, etc. I want my life insurance to cover the mortgage and funeral stuff and possibly a bit of money for my wife to put into savings for her retirement and a university fund. I wouldn't need to replace any monthly income as long as the mortgage is covered.

The part that I'm confused about is what sort of term I should choose. The ideal package would be one that gives declining coverage over time (the length of the mortgage) so as my needs reduce, my coverage and cost also reduces. I don't see anything like that, so I figure taking out shorter term insurance (like 5 year) and then adjusting the amount at each renewal stage would create that effect. Am I missing something here like my rates will go up as I age and I really won't see any benefit in cost even if the coverage amount is reducing? Should I just get a 25 year term to match the mortgage?

Through work I have access to life insurance benefits. They seem reasonably priced, but I'm not sure of the risk here. I assume it's that if I lose my job a number of years from now I could find that I missed out on locking in a good rate while I was younger/healthier. Is that the only consideration?

When I applied for my mortgage, the bank offered mortgage insurance. The rate seemed crazy, like 2-3 times the estimates I'm finding for regular life insurance. Is mortgage insurance a bit of a scam or is it a good product?

Thanks for any help!