Groupe financier Unibec
4875 Metropolitain Blvd E H1R3J2 Montreal, QC, Canada

IS MORTGAGE INSURANCE NECESSARY? Often people confuse mortgage default insurance with mortgage life and disability insurance, so let’s define both. In Canada, mortgage insurance is required federally on high-ratio loans that is, mortgages with a down payment of 20% or less. The insurance protects the lender in case of borrower default, providing lenders the flexibility to offer borrowers giving less cash, similar low interest rates they would to homebuyers who give more cas...h down. In short it’s a must if you’re giving less than 20% down payment on your loan. Mortgage life, disability and critical illness insurance are offered at signing by the lending institution to protect the homeowner, should he or she die prematurely, become disabled due to an illness or sickness or be stricken with a life threatening critical illness. Is mortgage life insurance necessary? For the majority of Canadians, a mortgage is the largest debt that they will carry during their lifetime. The duration of the loan period is more often, 20 years or more. So yes, mortgage protection is often necessary and should be an integral part of a sound financial plan. That said what and how much is needed all depends on the borrowers current financial situation. For example George and Bill both have a mortgage in the amount of 200 K but George’s financial situation is different than Bill’s. The mortgage insurance coverage should reflect their particular financial needs. Is the lending institution your best option? If you’re a healthy, non smoker, more often term life insurance products offer up to a 50% savings. Generally term individual products offer more flexibility, better benefits and are less restrictive. My advice, get informed, compare and see which option works best for you. Why pay more? If you like this article, give it a thumbs-up. Antoine, Tony Iannacci Financial Security Adviser