With mortgage life insurance, you are only covered for the outstanding balance of the mortgage. As for individually owned life insurance, you can include a range of other needs beyond the mortgage such as final expenses, children’s education or income replacement. Working with an independent financial advisor will allow you to discover the full amount of life insurance you require to protect you and your family
Just because you answered a few questions does not mean you are covered.
With mortgage life insurance, the issue process is very simple. Once you’ve answered yes or no to a few medical questions, the policy is issued. This straightforward process does come with a cost. Just because you answered the questions and were paying the premiums, it does not guarantee your coverage. These types of policies often use a method called post-claim underwriting. When a death claim is submitted, the insurance company goes back through the insureds medical history. If they find a discrepancy, the claim could be denied. Even after paying the premiums, you are not guaranteed to have your mortgage paid off. There have been many reports by media outlets concerning this. CBC’s Marketplace has done an in-depth report on mortgage life insurance titled In Denial.
There is no contention that a home is the largest financial commitment any family has to make. Ensuring a home is protected in case the primary breadwinner passes on should be a top priority. You must protect your mortgage with the right life insurance, one that meets your requirements. An independent insurance professional can help you with that.