Mortgage & Loan Insurance

Mortgage insurance offers low cost convenience

The last thing you want is for your family to be saddled with paying for your debt in the event you are not able to contribute to the payments for an unforeseen circumstance.

This is where loan insurance can play an important role.

Mortgage insurance^*** can offer life, disability, job loss coverage and critical illness, depending on the plan and policy options. You purchase it when you take out your mortgage.

For convenience, the premiums can be added to your regular mortgage payment, so you’ll never miss one. Here’s how it works:

• Mortgage life insurance allows your family to live mortgage-free should anything happen to you or your spouse. The insurance pays the insured mortgage balance plus accrued interest, settlement interest up to age 75 to a maximum of $1,000,000, and any mortgage pre-payment charge.
• Disability or illness option pays your monthly mortgage payment ($3,000 maximum) for up to two years up to age 75.
• Involuntary job loss pays your monthly mortgage payments to a maximum of $3,000 per month for nine months (per claim) up to age 75 for up to nine months tax-free.
• The critical illness option pays the insurable balance at date of diagnosis of a critical illness (cancer, stroke or heart attack) plus accrued interest, settlement interest, and any mortgage pre-payment charge. Maximum coverage is $1,000,000 and coverage ceases at age 75.

Note: This type of insurance is different from the Canada Mortgage and Housing Corporation's (CMHC) mortgage loan insurance, mandatory for homebuyers without the minimum 20% down payment required to qualify for a conventional mortgage.

Loan and line of credit insurance

Loan and line of credit insurance is very similar to mortgage insurance in that it provides coverage for life, disability, critical illness and job loss, depending on the plan. It is purchased at the time you take out your loan, and the premiums can be added to your regular loan payment.

The right advice makes all the difference

Protecting yourself and your family in the event of misfortune is critical. Whether these types of policies are right for you depends on your personal situation.

If you already have life insurance, it may be sufficient to cover these types of debts. If you don't have life insurance or would have a difficult time obtaining it due to your age or health, mortgage or loan insurance may be a viable and economical option.

The best approach is to discuss your needs with your financial advisor as an integral part of your overall financial plan.