Not at all. True, it is expensive, but whether you buy insurance is up to you.
Mortgage life insurance is not mandatory, but it does prevent your family or beneficiaries from suffering a potential foreclosure if they are unable to afford the mortgage payments on your matrimonial or family home when you die. The payout for mortgage life insurance is strictly the balance owing on your mortgage, and it goes directly to your mortgage lender.
That clears the mortgage charge on the property title. Your estate trustee can distribute the home according to your Will, or a legally married spouse can file a survivorship application for exclusive possession.
Don’t confuse mortgage life insurance with mortgage default or loan insurance. That’s a guarantee offered by high ratio insurers like CMHC, Canada Guaranty, or Sagen™. It allows your lender to get their money back if you default on your mortgage due to job loss, disability, or any other reason.
Is mortgage life insurance worth the expense? It’s useful to know the payments never change, even as your mortgage balance gradually declines. If that worries you, consider investing or buying general life insurance to protect your family instead.