Getting a home in Canada is a big responsibility. It is one of the largest investments you’ll make in your life, and your mortgage payments will be one of the biggest financial obligations you’ll have. Protecting your home and family is important—that is where mortgage life insurance comes in.
What is mortgage life insurance?
Paying your mortgage is essential to keeping the roof over your head. However, in case of your death, will your family be able to make those payments? Mortgage life insurance can help your family keep their home. If you pass away, mortgage life insurance will step in and cover the payments or reduce the principal amount owed on your mortgage.
Mortgage life insurance in Ontario may be offered when you are approved for a mortgage with a financial institution. However, you may also be eligible to buy insurance from another company, either at the time you take out your mortgage or in the future.
Depending on the mortgage life insurance plan you take, the company may pay for a percentage of your mortgage costs in the case of your death. There may also be options to take out insurance to cover your mortgage payments if you lose your job or become disabled. Speak to a mortgage professional about your options before you make a decision. They will be able to help you decide if mortgage life insurance is right for you.
Advantages of Mortgage Life Insurance
It is important to note that you don’t need mortgage life insurance to buy a home, but in some instances, it can be an advantage to have it in place. Here are some of the benefits to including mortgage life insurance when you buy your home:
- The premiums will be included with your mortgage payments, which makes it simple and easy to pay.
- You are free to cancel your insurance at any time. If you decide to cancel it within the first 30 days, you will likely be refunded for any premiums you did pay.
- If you continue to keep your mortgage with the same lender, you will also be able to keep your mortgage life insurance. This remains true even if you experience significant health challenges.
- Some people are not able to get regular life insurance. For those individuals, mortgage life insurance may be a good option.
What You Should Know About Mortgage Life Insurance
There are some important ways that mortgage life insurance differs from other insurance you may have. These include:
- Your premiums will stay the same for the duration of your insurance plan, but your coverage will decrease. The reason it decreases is that you are paying down your mortgage over time. Therefore, the amount of money that you need insurance for also decreases.
- Mortgage life insurance is not portable. That means that you won’t be able to keep your coverage if you change your mortgage provider.
- If your family needs to use your mortgage life insurance, the monies will be paid to the bank, not to your beneficiaries.
It is a good idea to shop around for rates and coverage options before you buy. It will help you get the right mortgage life insurance for you.
If you are interested in learning more about mortgage life insurance, call Northwood Mortgage™ at 888-492-3690 or contact us here.