If you've ever applied for a mortgage you'll know that they always offer you mortgage insurance and I'm hear to tell you (or remind you) not to get it. If you're on the other side and are a first time home buyer then even better, as you'll be armed with the info before dealing with the bank.
Now don't get me wrong, insurance is important, especially when it comes to covering your debt but there is a better way of doing it.
Your bank will have you pay a monthly premium to cover whatever is outstanding on your mortgage (hence 'mortgage insurance'). Sounds great right, but let's just think about that for a minute. You are going to be paying the same premium every month for the life of your mortgage but your mortgage is going to keep shrinking, so you are basically paying the same amount for less and less of a payout. Plus, the payout goes straight to the bank so you have no control over it. Not so great now huh?
Instead you're going to want to look at getting some term insurance for an amount that will cover your debt. A term life insurance policy will more than likely be cheaper than mortgage insurance, the payout will not decrease and that payout will come directly to the beneficiary who can use it for whatever they want. The term insurance will also stick with you for as long as the term whereas you will need to reapply for mortgage insurance anytime you move your mortgage. Cheaper, guaranteed payout amount and no need to renew if you change mortgage holders...lots of positives!
If you already have mortgage insurance you should be able to cancel it at anytime with no penalties. Definitely get some term insurance quotes, get that in place and then cancel your mortgage insurance to ensure there's no gaps in your coverage.