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MORTGAGE INSURANCE 

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MORTGAGE INSURANCE

 

Mortgage insurances (also called life and/or disability insurance) can cover the totality of your mortgage and/or the monthly payments (including taxes) for the entire duration of the loan (usually 25 years). The capital is paid in the event of a premature or unforeseen death, total disability or a dreaded critical illness of one or both of the co-owners of the debt (depending on the type of contract you own). This is a very important insurance and it’s totally different when compared to home insurance that protects your house in case of fire and water damage.

 

Although home insurance is a legal requirement when you buy a home, according to the statistics, you only have one chance in a thousand two hundred (1/1200) to need it in case of fire before age reaching age 65. On the other hand, before reaching 65 years, the likelihood of needing a:

*Statistics Canada, Canadian Disability Survey, 2012.

** Publication Canadian Cancer Statistics, 2017.

There are several types

MORTGAGE

INSURANCE:

MORTGAGE INSURANCE

The capital of the cover is paid in case of premature death, which affects one in fourteen (1/14) for different reasons before the age of 65. Here are the features you need to understand to make an informed choice:

MORTGAGE INSURANCE (OFFERED BY BANKS) 

1. The insurance capital declines over time alongside of your mortgage

2. The contract is generally expensive compared to the protective capital;

3. The contract is considered as low-end;

4. The premium changes over time;

5. You do not choose who will be the beneficiary of the protective capital ($), if you die, you only keep the house and you are freed from the mortgage debt;

6. The lending institution owns your insurance contract, so you lose it if you change the lender to get a better rate;

7. When a claim for the insurance money is requested, your health condition will need to qualify you for the insurance at that specific time, even after paying the contract for years you risk a denial;

 

8. The contract covers only the remaining mortgage of the house;

9. You are not protected by the professional insurance of an agent authorized to practice his profession and recognized by the AMF (Autorité des Marchés Financiers);

10. Mortgage insurance was created by lending institutions to protect themselves in case you could no longer pay because of a premature death or disability.

INDIVIDUAL INSURANCE WITH ONLINE INSURANCE  

1. The insurance capital will not change until the end of the contract;

2. The contract is generally inexpensive in relation to the protective capital;

3. The contract is considered high-end;

4. The premium will not change;

5. You choose who will be the beneficiary of the protection capital ($), so the money stays in the family instead of going to the lending institution and the house also stays in the family, even if a part of the debt remains, you could continue the payments with the interests generated by the amount you received without losing anything;

 

6. You are the owner of your contract, so no matter the lending institution, the contract will follow you;

7. When a claim for the insurance money is made, you will already be prequalified because your health was already known to your insurance company when it agreed to insure you;

8. The contract can cover your home and several other financial vulnerabilities, such as a student debt, a car loan, unpaid taxes, an amount for your spouse and children, etc.;

9. You are protected by the professional insurance of an agent authorized to practice his profession and recognized by the AMF (Autorité des Marchés Financiers);

10. Individual life insurance was created by insurance companies to protect you and your loved ones.

 

ADVICE:

Beyond the age of 80, if you plan on having some unpaid debts, you could consider a Permanent Life Insurance to cover the remaining debts beyond that age (examples: mortgage loan, estate taxes and investments taxes).

MORTGAGE INSURANCE DISABILITY

We also recommend you to own some form of disability insurance to cover a generous part of your salary or your debts or both. According to statistics, you have about a one in three chance (1/3) to be disabled for more than 3 months before reaching the age of 65 years. Here are some descriptions to help you make the right choice:

BANKING DISABILITY INSURANCE
​SALARY INSURANCE (INCOME)
LOAN INSURANCE (DEBTS)

DISABILITY INSURANCE

(FROM BANKS)

Covers only the monthly payment of your mortgage in case of a disability. This protection ensures the bank that you will be able to afford your monthly payments.

 

The majority of households need money to buy food, pay the electrical bill, car payments, credit card loans, etc. so this protection is generally insufficient to cover all the budgetary expenses. ​

INCOME INSURANCE (SALARY)

Can cover everything that you would normally pay with your income, it is the most versatile protection and contrary to popular belief, it does not cost more than bank disability insurance or debt insurance. 

LOAN INSURANCE (DEBTS)

Covers your mortgage payments as well as any other debts you have with one or more recognized financial institutions (like a car loan, line of credit, credit card debts and even a lease between you and your landlord) all in the same contract.

 
 
 
MORTGAGE INSURANCE IN CASE OF CRITICAL ILLNESS
 
MORTGAGE INSURANCE IN CASE OF A CRITICAL ILLNESS

We also recommend critical illness insurance in case of a serious illness or a very hard blow to your health. This type of contract covers its owner from the financial impacts of several dreaded diseases and health problems like cancer, paralysis, a coma, heart failure, sclerosis, loss of eyesight, severe burns, etc.

 

The different types of disability insurance only apply when a doctor tells you that you are totally disabled, meaning it’s totally impossible to go back to work. If your health problem enables you to go back to work a few hours or days per week, it is possible that you will not get any disability insurance benefits. If the health problem is an illness covered by your critical illness insurance contract, you will receive a fixed amount that, generally speaking, is about as much as you earn during an entire year or two, regardless of your ability to work.  

 

This kind of protection shouldn’t be overlooked, as statistics show that everyone has approximately a one in two chance (1/2) of you or a loved one will need it before the age of 65. Most of these contracts come with a refund option, at a higher premium, which reduces your risk of owning this insurance to almost zero.

 

This protection pays a lump sum that can cover your medical expenses, mortgage payments, medical care offered in the private sector, medical tourism fees, etc., so can focus on a full recovery.

• COMMENT CHOISIR UN CONTRAT D'ASSURANCE HYPOTHÉCAIRE? / HOW TO CHOOSE A MORTGAGE INSURANCE CONTRACT?


Généralement parlant, l’Assurance Vie Temporaire et une Assurance Prêt (ou Dette) sont les choix qui répondront le mieux à vos besoins au moment d’acquérir une nouvelle maison.

Une étude de vos protections est nécessaire pour déterminer celles qui seront pertinentes ou complémentaires. Par exemple, c’est normal pour un conseiller de considérer les montants qui pourraient provenir de plusieurs sources en cas de décès ou d’invalidité, comme :

  • Médic Construction pour les employés qui œuvrent dans le domaine de la construction;
  • CSST;
  • SAAQ;
  • Mariage ou conjoint de fait depuis plus de 3 ans pour la rente de conjoint survivant;
  • Âge de vos enfants pour la rente d’orphelin;
  • Assurance vie collective
  • Assurance salaire collective, etc.

Ensuite le conseiller calculera les montants nécessaires, trouver les assureurs qui sont les plus susceptibles d’accepter la demande d’assurance et, finalement, la recherche des primes qui seront les plus abordables ou compétitives.

/(English)

Generally speaking, Term Life Insurance and Loan Insurance (or Debt insurance) are the choices that will meet most of your needs when buying a new home.

A careful study of your financial protections is necessary to determine which ones will be relevant or complementary. For example, it is normal for an advisor to consider amounts that could come from multiple sources in the event of a premature death or a disability, such as:

  • Médic Construction for employees working in the construction field;
  • CNESST;
  • SAAQ ;
  • Marriage or common-law partner for more than 3 years for the surviving spouse’s pension;
  • Age of your children for the orphan’s pension;
  • Group life insurance
  • Group salary insurance, etc.

Then the advisor will calculate the necessary amounts, find the insurers who are most likely to accept your insurance application and, ultimately, find the premiums that will be the most affordable or competitive.




• COMMENT TROUVER LE MEILLEUR PRIX POUR ASSURANCE HYPOTHÉCAIRE? / HOW TO FIND THE BEST PRICE FOR MORTGAGE INSURANCE?


Pour répondre honnêtement à cette question, il faut comprendre que le prix d’une assurance ne se détermine pas simplement avec une calculatrice, ni un logiciel de courtier, ni même des soumissions, car il reflète comment la compagnie d’assurance évalue le risque financier qu’une personne de votre âge, de votre sexe, qui a votre historique de santé, vos habitudes de vie et même vos loisirs représente pour elle. Donc, c’est seulement une fois que l’assureur se penche sur l’étude complète de votre demande d’assurance qu’il viendra à conclure un prix ou une prime dans le jargon de l’assurance.

Si vous suivez les étapes suivantes avec le conseiller d’«Assurance En Ligne», vous obtiendrez ce que vous cherchez:

  • un service exceptionnel
  • un contrat de qualité
  • un prix avantageux

Les étapes :

  1. Profitez de la plateforme d’ Assurance En Ligne, car notre conseiller utilise des logiciels qui génèrent des primes très compétitives, alors vous pouvez magasiner la qualité du service et la rapidité de l’acceptation de votre demande d’assurance, en plus du prix;
  2. Obtenez une analyse complète de vos besoins financiers en cas de décès, d’invalidité et de maladies graves pour déterminer le(s) types d’assurances et le capital de protection nécessaire ;
  3. Découvrez le bon type d’assurance (pertinence, type, durée et prix) grâce à l’analyse;
  4. Notre conseiller dirigera votre demande d’assurance vers la compagnie d’assurance qui est la plus susceptible d’accepter votre profil de santé et le capital de protection que vous demandez (pour éviter les refus qui sont notés de façon permanente au MIB);
  5. Une fois que la compagnie d’assurance se prononcera (acceptation, surprime ou refus), la prime finale sera connue et garantie!

/(English)

To answer this question honestly, it is important to understand that the price of an insurance is not determined simply by a calculator, a broker’s software or even an estimate, because it reflects how the insurance company assesses the financial risk that a person of your age, your gender, who has your health history, your lifestyle and even your leisure activities represents for it. So, it is only once an insurer studies your complete insurance application that it will come up with a definitive price or premium.

If you take the following steps with an “Online Insurance” advisor, you will get what you are looking for:

  • exceptional service,
  • a quality contract,
  • a competitive and affordable premium.

Steps:

  1. Take advantage of the “Online Insurance” platform, because our advisors use software that generates very competitive premiums, so you can shop the quality of service and the speed of acceptance of your insurance application, in addition to the price;
  2. Get a complete analysis of your financial needs in the event of death, disability and critical illness to determine the type(s) of insurance and the required coverage;
  3. Discover the right type of insurance (relevance, type, duration and price) thanks to the analysis;
  4. Our advisor will direct your insurance application to the insurance company that is most likely to accept your health profile and the protective capital you requested (to help avoid denials that are permanently noted at the MIB).
  5. Once the insurance company has made a decision (acceptance, additional insurance premium or a refusal), the final premium will finally be known and guaranteed!




• EST-IL POSSIBLE DE CHANGER LE PRÊTEUR HYPOTHÉCAIRE ? IS IT POSSIBLE TO CHANGE MY MORTGAGE LENDER?


Oui, c’est possible de changer d’institution prêteuse. Vous pourriez considérer ce choix si votre taux augmente trop rapidement par rapport à votre capacité à payer votre maison.

Parlez à un(e) courtier hypothécaire indépendant pour connaitre les modalités, pénalités, avantages et désavantages pour faire un choix éclairé à ce sujet.

  • Si vous avez souscrit une protection d’assurance avec un conseiller, votre contrat vous appartient. Alors peu importe le choix d’institution prêteuse, il vous suivra et ne changera pas.
  • Si vous avez souscrit votre protection d’assurance auprès de votre institution prêteuse, le contrat ne vous appartient pas. Alors si vous changez de prêteur, le contrat cesse de vous protéger.
  • Si vous ne connaissez pas un courtier hypothécaire indépendant, c'est avec plaisir que nous offrirons une référence.
/(ENGLISH)

Yes, it is possible to change the lending institution. You may consider this option if your rate increases too quickly compared to your ability to pay for your home.

Talk to an independent mortgage broker about the terms, penalties, benefits and disadvantages to make an informed choice about this matter.

  • If you own an individual insurance contract, purchased with an advisor, the contract is yours. So regardless of the lending institution or bank, it will follow you and it won’t change.

  • If your insurance coverage comes from your lending institution or bank, then the contract does not belong to you. If you change the lender, the contract will be void and will stop protecting you and your family.

  • If you do not know an independent mortgage broker, we will be happy to provide a reference.




• EST-CE QU’IL FAUT ACHETER UN SEUL TYPE D’ASSURANCE POUR COUVRIR L’HYPOTHÈQUE DE LA MAISON OU PLUSIEURS EN MÊME TEMPS ? POURQUOI? / DO I HAVE TO BUY A SINGLE INSURANCE CONTRACT TO COVER THE MORTGAGE OR MORE THAN ONE? WHY?


En règle générale...

  • Si vous avez un enfant, c’est l’Assurance Vie Temporaire qui devrait être votre première priorité, car votre enfant ne peut pas gagner un revenu et un lieu d’habitation est d’une priorité absolue pour lui, c’est une question de survie.
  • Si vous n’avez pas d’enfants, c’est l’Assurance Salaire qui devrait être votre première priorité, car votre revenu sert à payer tout ce dont vous avez besoin pour vivre et travailler, même épargner pour vos projets futurs ou la retraite.
  • L’Assurance Maladie Grave occupe la deuxième ou troisième position, alors si vous n’avez pas d’enfant, elle est deuxième, mais si vous avez un enfant, elle devrait être troisième en ordre de priorité même si elle est la plus susceptible d’être utile.

/(English)

The general rule of thumb is…

  • If you have a child, it is the Term Life Insurance contract that should be your first priority because your child cannot earn a living wage and having a place to live is a top priority for him, it’s a question of survival.
  • If you do not have children, it is the Salary Insurance contract that should be your first priority because your income is used to pay for everything you need to live and work, even to save for future projects or retirement.
  • Critical Illness Insurance is in second or third place, so if you do not have a child, it falls to second place, but if you have a child, it should be third in order of priority even though it is most likely contract to be useful to you someday.





MORTGAGE INSURANCE

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