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Why You Should Consider Mortgage Insurance

General Trevor Bumstead 21 Apr

Prior to becoming a licensed mortgage agent, I was in the same camp as most in asking, “Why do I need additional mortgage coverage?” Not only did I have great coverage through work, but my wife and I had also purchased a term insurance plan as secondary coverage when we got married. We were covered, right? Well guess what…live happens.

Here we are…10-Years later…2 kids…4 moves…job relocations and career changes…finally our dream house…and now, a global pandemic. Exactly how we
planned it out over a decade ago, right. Ok, so not quite.

Job changes triggered coverage gaps and our expanded family (and mortgage) meant we no longer had sufficient insurance.

As a member of your financial team, I have a responsibility to ensure that your largest single asset is protected for the future. Although you may have coverage through your workplace or privately, the above is a personal example of how mortgage protection can help fill the gaps to help protect you and your family in case the unexpected happens.

What are the two types of Mortgage Insurance?

  • Life Insurance – Pays off the mortgage if one of the mortgage holder passes
    • Most work insurance plans cover less than 2x salary
    • Work insurance acts as short-term Income Replacement vs. Mortgage Insurance which is long-term Debt Elimination
    • Immediate coverage is available
    • Mortgage payments are paid while claim is being settled (no delays)
    • 1-in-5 households would face immediate financial uncertainty if primary wage earner suddenly passed
  • Disability Insurance – If you suffer a serious injury or illness and are unable to work, mortgage payments (and property tax) will be covered
    • Disabilities can include both physical and mental health issues
    • More common than you might think as 1-in-3 Canadians will be disabled for 90 days or more before age 65
    • 56% of Canadians on disability leave returned to work early due to financial reasons
    • Includes Terminal Illness coverage which will pay your mortgage so you can focus on self care

Why choose coverage through your Mortgage Agent?

  1. The coverage I arrange for you moves with you whether you change properties or switch banks – this is unique as bank or solicitor offered coverage is tied to the mortgage only
  2. Coverage isn’t dependent on your place of employment or status (ex: layoffs, furlough, Covid disruptions)
  3. Work insurance is often not sufficient coverage – Mortgage Insurance is a great way to top-up existing coverage to protect your family
  4. No Risk Coverage – 60-Day money-back guarantee if you change your mind

No one enjoys talking about insurance but it is an important component of your overall financial plan. Make sure you have the right Life and Disability Insurance to cover your mortgage payments and help protect the people you love.

Give me a call or drop me an email for a no-obligation mortgage review – and if you have family or friends that could benefit from these services, I will welcome the introduction.

Be well and talk again soon,