Mortgage Insurance
Protecting your mortgage – your insurance options
The purchase of a home is a major financial commitment, and how best to safeguard your investment is something you have to consider. There are a range of insurance products available to make sure that your home and your family's lifestyle are protected. But before you can make an informed choice, it is important to take the time to look at all the possibilities.
Here's a quick sketch of various forms of insurance you should consider.
"Mortgage Insurance" is required by law to insure lenders against default on mortgages with a loan to value ratio greater than 80%.
Homeowner's Insurance provides coverage against losses on the physical home and its contents, along with personal liability coverage.
Mortgage Life Insurance pays off your outstanding mortgage balance in the event of your death.
Mortgage Critical Illness Insurance also pays off your outstanding mortgage balance in the event you are diagnosed with severe illnesses such as heart attack, stroke or life threatening cancer.
Mortgage Disability Insurance pays your mortgage payments should you become disabled and are prevented from performing the normal duties of your job.
In the case of life, critical illness, or disability insurance, in deciding which products are best for you, it is helpful to ask questions, such as:
- Is the insurance portable? With insurance that's portable, there's no need to re-apply for coverage if you happen to switch lenders, or move the mortgage to a new home.
- Can you cover more than two individuals with the same policy at a reduced cost? This is important when guarantors are required for you to qualify for the mortgage.
- Is pre-closing coverage available? With coverage that begins as soon as your insurance application has been accepted, you are protected in case an unexpected event occurs prior to the mortgage closing date.
Your financial picture changes significantly when you get a new mortgage. This creates a need for insurance coverage to protect your new investment and your family's future. In addition to providing a wealth of information on getting the mortgage that best suits your needs, a mortgage advisor can also help you obtain the right mortgage-related insurance solution.
