DEFINITION:Mortgage Disability Insurance in Canada refers to an insurance coverage that provides protection to homeowners in the event that they become disabled and are unable to make their mortgage payments. This insurance policy ensures that the mortgage payments are still made, relieving the financial burden placed on the homeowner during their disability.
FAQs:
1. What does Mortgage Disability Insurance cover?
Mortgage Disability Insurance covers the mortgage payments of homeowners who have become disabled and are unable to work, typically due to illness or injury. It helps ensure that the mortgage payments are made on time even when the homeowner is unable to earn an income.
2. How does Mortgage Disability Insurance work?
When a homeowner with Mortgage Disability Insurance becomes disabled and is unable to work, they can make a claim with their insurance provider. If the claim is approved, the insurance company will make the mortgage payments on behalf of the homeowner for a specified period, usually until the homeowner recovers or reaches a certain age.
3. Can anyone purchase Mortgage Disability Insurance?
Mortgage Disability Insurance is typically available to individuals who have a mortgage on their primary residence in Canada. However, eligibility criteria and coverage options may vary among insurance providers, so it is advisable to check with specific providers or insurance brokers.
4. Are there any limitations or exclusions with Mortgage Disability Insurance?
Like any insurance policy, Mortgage Disability Insurance may have limitations or exclusions that vary depending on the insurance provider and policy. It is important to carefully review the terms and conditions of the policy to understand any limitations or exclusions, such as pre-existing conditions or waiting periods before a claim can be made.
5. Do I need Mortgage Disability Insurance if I already have other insurance coverage?
While other insurance coverage may provide some financial protection during a disability, Mortgage Disability Insurance specifically targets mortgage payments. This type of insurance ensures that your mortgage payments are covered when you cannot work due to a disability, offering additional security and peace of mind.
6. How much does Mortgage Disability Insurance cost?
The cost of Mortgage Disability Insurance depends on factors such as the insured amount, the length of coverage, the homeowner’s age, health, and occupation. Premiums can vary among insurance providers, so it is recommended to obtain quotes from multiple providers to find a policy that best fits your needs and budget.
7. Is Mortgage Disability Insurance mandatory in Canada?
Mortgage Disability Insurance is not mandatory in Canada. However, it is highly recommended for homeowners who want to protect their investment and ensure their mortgage payments are covered in case of disability. It provides financial security and prevents the risk of losing one’s home due to inability to make mortgage payments during a period of disability.