In Ontario, homeowners can add life insurance to their mortgage. Mortgage life insurance in Toronto requires a premium to be added to each monthly mortgage payment.
Like general life insurance, this coverage protects your loved ones from expenses in the case of your death, specifically regarding your mortgage loan.
At Northwood Mortgage, we help Canadians get the right mortgage life insurance for their mortgage product. We work with home and business owners across Toronto and the GTA and partner with the top financial institutions in Ontario to guarantee the best coverage and rates.
Here, we’ll talk a bit about mortgage life insurance and how it works here in Ontario.
Is mortgage life insurance in Toronto the same as mortgage default insurance?
Mortgage life insurance is not mortgage default insurance. In Canada, homeowners are legally obligated to acquire default insurance if their down payment is between 5% and less than 20% of the total house cost. This is provided by the Canada Mortgage and Housing Corporation, or CMHC.
Mortgage life insurance is a separate product offered by your bank. This is an optional type of coverage.
What does mortgage life insurance do?
Mortgage life insurance in Toronto is a safeguard against repayment to your lenders in the case of your death. If you pass away, mortgage life insurance continues to make your mortgage payments on your behalf.
This protects your family from losing the home you have put so much time, energy, and money into over the years of your life.
If you pass, the monthly payments you have made for mortgage life insurance are paid out as a lump sum to cover the cost of your outstanding mortgage amount.
Calculating Mortgage Life Insurance Premiums
The premium for your mortgage life insurance policy depends on your down payment and mortgage size. This premium remains the same throughout your mortgage, although the payout decreases based on what is owed.
In other words, as you pay down your mortgage, the payout amount lessened by the premium remains untouched.
Can’t my personal life insurance pay my mortgage?
Personal life insurance isn’t the same as mortgage life insurance in Toronto. Your personal life insurance money can be used however your beneficiaries see fit.
This could leave the mortgage on your home to default if no beneficiaries choose to spend their policy money on the mortgage payments.
A life insurance policy is a great secondary product, as it continues to pay out even when your mortgage or other debt is paid. If you’re concerned about your mortgage being taken care of in the event of your passing, however, mortgage life insurance is the best option.
Contact Northwood Mortgage
Interested in learning more about mortgage life insurance in Toronto? Northwood Mortgage can help.
Our team of experienced brokers is well-versed in various mortgage products, including mortgage life insurance.
We can help you get the best rate from our partnered financial institutions and give you a little peace of mind regarding your home. Call us at 1-416-969-8130 or visit us online.