Mortgage Protection Coverage in Vancouver Explained
If you’ve recently bought a home or you’ve asked a lender to refinance your existing home, then you were likely asked if you wanted mortgage protection coverage, also known as mortgage insurance. Some lenders will even require that you take out this type of coverage as a condition of approving the loan.
There are three parts to mortgage protection coverage and these are: life insurance, critical illness insurance, and disability insurance.
- The mortgage life insurance component will pay all or part of the balance of the outstanding mortgage in the event of the borrower’s death.
- The critical illness insurance component will pay all or part of the balance of the mortgage on diagnosis of a covered condition such as Cancer, Heart Attack, or Stroke.
- The disability insurance component will pay all or part of the monthly mortgage payment due in the event of a disability, typically an injury or illness that results in an inability to do your regular job.
When you choose to protect yourself or your family with mortgage protection coverage or if your lender requires you to take this type of coverage, you have a choice of taking the policy that comes with the lender’s mortgage or a standalone policy through a Broker.
What Other Options for Mortgage Protection Coverage?
While the lender’s policy is easier to apply for, there are advantages to taking a standalone policy. These advantages include level vs declining coverage, guaranteed insurability with the built-in conversion clause, portability to multiple lenders and/or properties, and underwriting at the time of application rather than at the time of claim (post-claim underwriting).
In the end, you want a policy that best protects you and your family rather than the lender. For this reason, it is important for you to carefully review the policy contract that you intend to buy.
Vancouver Mortgage Protection Coverage Experts
Contact us at Venture First Advisory and we’ll help you get the mortgage life insurance that best suits you and your family’s needs. We’re the experts in helping you get the best insurance policy for with your best interests in mind.