Mortgage Protection Insurance

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CONGRATULATIONS! You have just become approved to become a new homeowner and are so excited to move into your new home with your family. However, you are also aware that a mortgage is a long-term obligation to pay back the money that you have borrowed, and unfortunately, many things can happen over the years that can hinder you from making those payments. It is so important to protect yourself and the ones you love by purchasing the right mortgage protection.

It is interesting that most homeowners will generally choose to purchase Life Insurance for their Mortgage Protection to ensure that in the event of their death, the mortgage can be paid in full. But most do not consider the impact on their ability to pay their mortgage in the event of a Disability or Critical Illness. In Canada, a Critical Illness or Disability is the number one cause of foreclosures – approximately 50% of Canadian foreclosures are due to the Disability of the breadwinner! Don’t become a statistic – insure yourself for Death, Disability, and Critical Illness!


What is the difference between Mortgage Insurance and Mortgage Protection Insurance?

Mortgage Insurance is usually provided and controlled by the Lender by means of a Creditor Group Insurance plan and the benefit is paid to the lender at the death of the insured..Other defining aspects of Mortgage Insurance would be:

Only the individual or individuals listed on the mortgage are covered.

Lender is the Beneficiary

-Coverage is NOT GUARANTEED. Neither your premiums nor your benefits are guaranteed as the Lender can change or cancel the policy at any time.

-The policy is underwritten at time of claim! You may be disappointed to discover that you do not qualify for the coverage.

Since Mortgage Insurance is usually provided through a group plan, each insured will pay the same rate for their coverage as everyone else in that class regardless of how healthy you are.

-No Portability of the coverage. If you change mortgage providers, your Mortgage Insurance does not automatically go with you. As such you will need to provide evidence of insurability for the new Lender.

-You have ZERO Flexibility to change your coverage as your needs change.

As you pay down your mortgage the benefit decreases but the premiums remain the same. When the mortgage is paid off, you lose all of your coverage.
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Mortgage Protection Insurance is purchased individually and OWNED by the Insured. The proceeds of the benefit are paid to the designated beneficiary and can be used for many different reasons apart from simply paying the remaining mortgage.

Other defining aspects of Mortgage Protection Insurance would be:

You are able to design your OWN plan to protect you, your partner and your children if you wish.

As the OWNER of your plan, you name your Designated Beneficiaries.

-Your coverage is GUARANTEED! Your premiums and benefits are guaranteed for the life of your policy. Only you can cancel or make changes to your policy.

-Your policy is underwritten when you apply for the coverage not at time of claim! Therefore, you know exactly what you qualify for and are eligible to receive. No surprises!

The premium rate you will pay for your coverage is based on your age, health and smoking status. So if you are healthy, your cost of insurance will be reflective of that fact.

You have total portability as you OWN your insurance so your coverage will protect you regardless of who becomes your new lender.

You have total flexibility to make changes to your coverage as your needs change since you OWN your own coverage.

With your OWN coverage, you can design each policy to provide the amount and type of coverage you require during your lifetime…even if you repay your mortgage.

Based on the above information, you may be wise to avoid the mortgage insurance offered by banks, credit unions, trust companies, and mortgage brokers for both your Life and Critical Illness Mortgage Insurance! The numerous advantages of personally OWNING your Mortgage Protection Insurance are too many to list, but the major one to consider is that you OWN and CONTROL your own protection…PERIOD!

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It is often recommended that if the intent of the Mortgage Protection Insurance is to cover the debt for a specific period, then Term Insurance with matching term of the loan, would be the most economical form of insurance. If your intent is to insure the mortgage but to also include the other long-term insurable interests such as Family protection, Estate preservation or Retirement, then Permanent Insurance may be the solution for you!

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At Health Risk we are able to assist you in your journey to understand and purchase the various Personal Insurance Products that would be ideal to your unique and individual circumstances for Mortgage Protection Insurance. Remember that you are able to protect your loved ones by protecting your:

Call Us…We Are Here To Help!

DISCLAIMER: Please be advised that the information on this web site is intended to present a broad variety of general information as simply and accurately for your knowledge as we possibly can. In no event does this information form part of or apply as a legal document. Therefore, please note that rules, conditions and industry practices discussed may be changed over time.