Yogesh Bansal

Canadians owe $2.06 trillion in household debt, according to the Bank of Canada, 2/3 of which is residential mortgage debt. To protect these mortgages, homeowners have options: mortgage insurance provided by a financial institution, or mortgage protection using life insurance and critical illness insurance provided by an insurance company.

Mortgage insurance works by paying off the outstanding principal balance of your mortgage should you die. It will pay the monthly payment, if you are not able to go to work, due to an accident or sickness, or pay a lump-sum amount if you get diagnosed with one of the listed illnesses.

This insurance is also offered by the banks. But most times, no medical is conducted at the time of setting up the contract. But medical insurance is reviewed at the time of processing the claim.

This results in a lot of denials from the insurance as well. Whereas, while getting this protection offered by a licensed professional, you will go through the medical testing upfront. Hence, giving you the peace of mind that you will be paid at the time of and unforseen event.

Like described above, Mortgage Insurance can combine a number of insurance products to protect you, i.e. Life Insurance, Critical Illness Insurance, and Disability Insurance.

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