Internet Explorer
What is mortgage protection insurance?
If you’re buying a home, there’s a lot to think about. As you begin making choices from finding the best mortgage rates to choosing your colour scheme, it's good to know you also have choices when it comes to protecting your mortgage and your family's finances from the unexpected.
While you know you’ll need insurance, it’s important to understand the different types of coverage and the different kinds of policies.
Homeowner's insurance is not the same as mortgage insurance
- Homeowner's insurance, also known as property or home insurance, helps protect your home from physical threats like fire, water damage, accidents, and loss of property from theft. It’s required when you have a mortgage.
- Mortgage protection insurance helps cover your mortgage payments if you become seriously ill or die unexpectedly. It’s a smart way to secure your future.
Types of mortgage protection insurance:
Choosing both term life insurance and critical illness insurance together gives you and your family the right protection when you need it most.
Critical illness insurance
- If you become seriously ill, you’ll receive a lump-sum payment to spend as you choose, on things like medical expenses and mortgage payments so you can focus on recovery.
Term life insurance
- Gives you affordable, flexible protection that your loved ones could use to pay off your mortgage or cover other expenses if you die unexpectedly.
The difference between mortgage insurance policies
Most mortgage lenders will give you the option to apply for mortgage insurance directly through them. But before you finalize your mortgage, think about how different their policies are from ours.
Mortgage insurance through a mortgage lender
The mortgage lender is automatically the beneficiary
Term life insurance and critical illness insurance from Sun Life Financial
You decide who gets the insurance benefit and how it's used – to pay your mortgage, medical expenses or your child's education – whatever is best for you and your family
Mortgage insurance through a mortgage lender
The coverage amount decreases as the mortgage balance decreases. When the mortgage is paid off, the coverage ends
Term life insurance and critical illness insurance from Sun Life Financial
The amount of coverage you have stays the same for as long as you own your policy – unless you decide to change it
Mortgage insurance through a mortgage lender
You may lose the coverage and might need to reapply
Term life insurance and critical illness insurance from Sun Life Financial
Your coverage stays the same – unless you decide to change it. Since your coverage is not tied to your mortgage, you can carry it with you if you move again
Mortgage insurance through a mortgage lender
You lose all the money you paid for the coverage
Term life insurance and critical illness insurance from Sun Life Financial
Depending on the terms of your insurance policy, you may get some of the money back that you've paid in premiums*
*Depends on the type of critical illness insurance you have and does not apply to term life insurance.
Do you really need mortgage protection insurance?
A mortgage is a long-term obligation to pay back the money you’ve borrowed – and a lot of things can happen over the years. Whether you're single, married or living common law, and whether you’re with or without children, it's important to protect yourself and the ones you love.
Are you buying a bigger home for your growing family?
How term life insurance helps
- Term life insurance can help you protect your family's finances.
- Your beneficiary can use the coverage to pay the balance of your mortgage, or put it towards your children’s education.
- Some term life insurance plans give you the option to cover your children, too, protecting their future insurability.
How critical illness insurance helps
- Critical illness insurance is available for you, your spouse and your children.
- If one of you becomes seriously ill, the insurance benefit could help replace any lost wages when you take time off work to recover or to help your spouse or child get better.
- The insurance benefit comes directly to you so you'll be able to use it for other expenses and not just your mortgage payments.
How, together, both types of insurance help
Building a plan that that includes both term life insurance and critical illness insurance means your family has the best possible protection against the significant impact of unexpected illness or death.
Get mortgage protection insurance
Step 1: Find an advisor
Choosing the right mortgage protection is easy with help from an advisor. Talk to your advisor or find an advisor to help answer your questions. There is no cost to talk to an advisor.
To get the most out of the meeting with your advisor, take some time beforehand to think carefully about what you want to achieve. And because your advisor will need additional information to help recommend the policy that’s right for you, get together some basic information about your income, assets and liabilities.
Your advisor will handle the paperwork for you. You’ll need to submit an application for a policy that will be evaluated by the insurance company. Depending on your age and the type and amount of coverage you want, you will need to answer a medical questionnaire. You may also be asked to provide additional medical information.