Mortgage Life Insurance in Canada

Are You Protecting Your Most Valuable Asset?

When you have a mortgage, it’s important to ensure that your loved ones are protected with the right type of life insurance coverage. While your lender may offer you creditor mortgage insurance, it doesn’t always provide the same type of ownership you and your family needs.

Mortgage life insurance obtained through one of our life insurance carriers provides top solutions and has many benefits that your lender may not provide.

What Are the Benefits of Mortgage Life Insurance?

  • Get your mortgage partially or fully paid off in the case of disability, critical illness, or death
  • Protect your family from financial hardship
  • Ensure that your family home stays in your family’s hands
  • Additional peace of mind knowing that your family is taken care of

 

What Is Mortgage Life Insurance?

Mortgage life insurance coverage is designed to provide a payout in the event of a death of you or your partner.

While it provides financial protection against death, you also have the option to add either:

  • Critical illness insurance (link to article) that provides a lump sum payout in the event of a diagnosis of a critical illness
  • Disability insurance (link to article) that provides payments that replaces a portion of your income in the event you’re not able to meet your regular duties at work.

You have the option to combine these coverage to offer the best protection for your mortgage.

 

Personal Mortgage Insurance vs. Lender Mortgage Insurance

Many lenders offer creditor insurance which is different from personal mortgage life insurance offered by one of our insurance carriers. While your lender may offer this insurance, personal mortgage life insurance has many advantages and benefits that your lenders insurance may not offer.

Take a look at the chart below:

chart here (need to clarify with Lorenzo)

Creditor Insurance

Do I own the policy? – No the banks does

Who is my beneficiary – The lender

Can I choose my coverage amount – No, it has to be the same as your mortgage

Can I choose how long I’m covered for? – No, it’s the same as your mortgage amortization

Does coverage stay level? – No, it decreases as your pay down your mortgage

Can I transfer my coverage to another lender? No

Can my beneficiaries choose what to do with the payout? No

 

Personal Mortgage Insurance

 

Do I own the policy? – Yes

Who is my beneficiary – You name the beneficiary

Can I choose my coverage amount – Yes

Can I choose how long I’m covered for? -Yes 

Does coverage stay level? – Yes

Can I transfer my coverage to another lender? Yes

Can my beneficiaries choose what to do with the payout? Yes

 

[CHART END]

Pre-Underwriting vs. Post-Underwriting

There are many differences in how personal and creditor life insurance policies work when it comes to your mortgage.

A pre-underwriting policy will determine how claims are to be made prior to the policy being created. This makes it easy for your spouse to understand the specifics as all details are outlined before a policy is officially signed.

A post-underwriting policy is what most creditors use. Your eligibility to make a claim is determined after the initial policy was created. This provides creditors with substantial leverage to deny claims for a variety of reasons.

It’s recommended that you seek out a pre-underwriting policy because they are more predictable, coverage is guaranteed as defined by the policy, and you are the owner of the policy, not a large financial institution.

Mortgage Insurance FAQ

Will I need to do a medical?
This depends on the amount of coverage that you are applying for. Insurance companies have non-medical limits where you only need to answer medical questions up to a certain limit. However, certain insurance companies always reserve the right to ask for a blood or urine test, or a copy of your doctors records. Ask us about a non-medical option if you prefer a more simple approach to underwriting.
The bank doesn’t ask for medical, does that make it easier?
While the bank doesn’t ask for medical exams, this is usually because they use a post underwriting policy. This means even though you didn’t provide any medical evidence when you applied, your lender will when you claim to determine if you are eligible when you file a claim. This means there is always a chance that you get denied for a claim even when you’ve been paying your premiums.

Why Choose Our Commonwealth for Your Mortgage Insurance Needs?

At Our Commonwealth, we focus on making sure we find you the best type of coverage that meets your needs. We have access to many different insurers to guarantee that you get offered the best solutions available.

Contact our Vancouver office if you need a quote for personal mortgage life insurance from a licensed insurance broker. Our team will take the time to walk you through all of your options, explain each policy, and address any concerns that you may have.

 

Don’t Wait Until It’s Too Late

Get the Mortgage Insurance You Need Today

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