5 Options To Consider For Insuring Your Mortgage – By Perminder Chohan

LIFE INSURANCE SOLD BY YOUR MORTGAGE LENDER

This is a practical solution you can arrange when you sign for your loan. With this option:

  • The financial institution owns and is the beneficiary of the policy
  • In the event of your death, the insurance company will pay the balance of the mortgage to the lender
  • The insurance covers only the amount of the mortgage loan; so the amount of coverage decreases as you pay off your mortgage
  • Insurance coverage ends when the mortgage loan is repaid or you change financial institutions

PERSONAL LIFE INSURANCE

This is an insurance policy you contract with an insurance company of your choice through your DFSIN advisor. With this option:

  • You own the policy and you designate the beneficiary
  • In the event of your death, the insurance company pays a benefit to the beneficiary, which may be used to repay the mortgage or other loans, or for any other purpose
  • The amount of coverage is not linked to the mortgage balance; it remains the same throughout the life of the policy
  • Coverage does not end when you pay off your mortgage or change financial institutions; you maintain your insurability and may use the insurance to cover other risks

DISABILITY INSURANCE

This type of insurance pays a monthly benefit that replaces part of your income if you are unable to work because of a disability. You can use it to meet any of your financial obligations, such as mortgage and other loan payments. Note that some financial institutions offer disability insurance associated with your mortgage loan, but you can also buy your own disability insurance from the provider of your choice through your DFSIN advisor.

This type of coverage is particularly advised if you are self-employed or in business and don’t have group insurance.

CRITICAL ILLNESS INSURANCE

Critical illness insurance pays a predetermined benefit if you are diagnosed with one of the illnesses listed in the policy. The insurance usually covers about 20 illnesses, including cancer, multiple sclerosis and Alzheimer’s disease. The money may be used to compensate for lost income, pay for medical care, or for any other purpose at your discretion. It can also be used to repay all or part of your mortgage.

ARTICULATE YOUR STRATEGY

  • In an insurance portfolio customized to meet your needs