Buying a home is one the biggest investments my clients will make in their life. We want to ensure that if something happens that could affect your ability to pay your mortgage, you are covered.
Like any other product, Mortgage Insurance from the bank or lending institute has its Pros and Cons. The biggest Pro is that if you can qualify for the mortgage, you can usually qualify for the Bank offered Mortage Insurance.
The biggest Con is that it is the bank that is insured, not you or your family. Related issues is that while your mortage balance is decreasing, the insurance premiums aren’t. As well, the Mortgage Insurance is underwritten at the time of claim, so it provides extra time for the underwriter to find reasons to deny the claim.
BUT
There are alternatives.
Life Insurance
Life insurance covers, in part or in full, this financial commitment in case of death. Using term coverage provides the freedom to choose the exact duration of the insurance term, from 10 to 40 years, and the premiums won’t increase.
Disability Insurance
Disability Insurance is designed to replace your income while you are disabled and unable to earn that income. This allows you to pay your regularly occuring expenses, in part or in full, while on disability.
Critical Illness Insurance
Provides you with financial assistance once you receive a diagnosis of a critical illness. This will allow you to honor financial commitments, such as a mortgage while you recover. It can also provide the means to pay for medical treatments and medicines that aren’t covered by other Health Insurance (like your provincial plan or your employer group benefits).