Mortgage Protection Insurance in Guelph & Ontario
When you sign your mortgage, someone will probably ask if you want mortgage insurance. It's an easy yes when you're already signing a stack of papers. But it's worth knowing what you're agreeing to, because coverage arranged through your lender and a policy you own yourself can work very differently.
Two things that sound the same but aren't
Mortgage default insurance (from CMHC or a similar insurer) is required when your down payment is under 20%. It protects the lender if you stop making payments. It does nothing for your family.
Mortgage protection insurance pays off or pays down your mortgage if you die, and some versions also help if you become seriously ill or disabled. That's the one this page is about.
Lender coverage vs. a policy you own
Coverage offered through your lender (often called creditor insurance) and an individual policy you own can look alike. Here's how they typically differ:
- Who gets paid: Lender coverage pays the lender. A policy you own pays the people you choose, and they decide whether paying off the mortgage is the best use of the money.
- As you pay down the mortgage: With lender coverage, the amount covered usually shrinks as your balance drops. With your own term policy, the coverage amount stays level for the term.
- If you switch lenders or move: Lender coverage generally stays with that mortgage. Your own policy goes with you.
- When your health is reviewed: Some lender coverage asks only a few health questions at sign-up and looks more closely when there's a claim. An individual policy is reviewed up front, so you know where you stand before you ever need it.
Every product is different, so read the details of whatever you're offered. We're happy to look at it with you.
Should you cancel what you already have?
Not until something better is approved and in place. Never cancel existing coverage first. We'll help you compare, and if a personal policy makes more sense, we'll make sure there's no gap in between.
Frequently Asked Questions
Protect the people who live there, not just the loan
Bought a home recently, or renewing soon? Get a quote or book a call. My name is Trevor, and I'll show you the difference in plain English so you can choose with confidence.