Mortgage protection insurance

What is mortgage protection insurance?

When purchasing a home and obtaining financing to complete the sale of a home, mortgage lenders often offer consumers the option of buying mortgage insurance, or creditor insurance as it’s sometimes known by.

Mortgage insurance can pay some or all of the outstanding principle amount owed on the mortgage to your lender in the event of your death. The idea is that insurance takes care of your family’s interest in the home.

The challenge for your family may be that their financial needs extend beyond just a mortgage, and may have other expenses to cover as well. Mortgage insurance pays all or part of your mortgage debt, but does not leave any money for your family.

Flexible alternatives to mortgage protection insurance

Sun Life offers several alternatives to mortgage protection insurance that enable your family to protect your mortgage while also giving them the flexibility and choice to use the benefits as needed.

Choosing term life insurance and critical illness insurance could give you and your family the right protection when you need it most.

Types of mortgage protection insurance:

Choosing both term life insurance and critical illness insurance together gives you and your family the right protection when you need it most.

Critical illness insurance
  • If you become seriously ill, you’ll receive a lump-sum payment to spend as you choose, on things like mortgage payments or medical expenses so you can focus on recovery.

Learn more about critical illness insurance

Get a quote

Term life insurance
  • Provides affordable, flexible protection that your loved ones could use to pay off your mortgage or cover other expenses if you die unexpectedly.

Learn more about term life insurance

Get a quote

The difference between mortgage insurance policies and Term life and Critical illness insurance

Most mortgage lenders will give you the option to apply for mortgage insurance directly through them. But before you finalize your mortgage, think about how different their policies are from ours.

 

Mortgage insurance through a mortgage lender

Term life insurance 

Critical illness insurance 

Who does the insurance cover?

One or more of the individuals listed on the mortgage

You, your partner and your children – you can protect your whole family, even those not responsible for paying for your mortgage

You, your partner and your children – you can protect your whole family, even those not responsible for paying your mortgage

Coverage

Covers the remaining balance outstanding on your mortgage only

Anything your loved ones need it to cover. In addition to your mortgage, it can cover debts like your line of credit, credit cards, etc.

Anything your loved ones need it to cover. In addition to your mortgage, it can cover debts like your line of credit, credit cards, etc.

Who gets the benefit if I die or become seriously ill?

The mortgage lender is automatically the beneficiary

You decide who gets the insurance benefit

You decide who gets the insurance benefit

What happens as my mortgage balance decreases?

The coverage amount decreases as the mortgage balance decreases. Your rates stay the same. When the mortgage is paid off, the coverage disappears

The amount of coverage stays the same for as long as you own your policy – unless you decide to change it. Your rates won’t go up.

The coverage amount stays the same for as long as you own your policy – unless you decide to change it.  Your rates won’t go up.

What if I switch mortgage lenders?

You may lose the coverage and might need to reapply. Your premiums may be different each time because the rates may have changed since your previous application. You may also have to answer health questions when you re-apply.

Your coverage stays the same – unless you decide to change it. Since your coverage is not tied to your mortgage, you can carry it with you if you move again

Your coverage stays the same – unless you decide to change it. Since your coverage is not tied to your mortgage, you can carry it with you if you move again

How can I apply?

You would have to check with your mortgage lender.

Get a quote & apply

 Or find an advisor

Get a quote & apply

Or find an advisor

It’s important to get advice. It can help you achieve your goals.

  • Step 1
    Find an advisor

    Choosing the right mortgage protection is easy with help from an advisor. Talk to your advisor or find an advisor to help answer your questions. There is no cost to talk to an advisor.

    Find an advisor

    How advisors help

  • Step 2
    Meet with your advisor

    To get the most out of the meeting with your advisor, take some time beforehand to think carefully about what you want to achieve. And because your advisor will need a lot of information to help recommend the policy that's right for you, get together some basic information about your income, assets and liabilities.

  • Step 3
    Apply for coverage

    Your advisor will handle the paperwork for you. You’ll need to submit an application for a policy that will be evaluated by the insurance company. Depending on your age and the type and amount of coverage you want, you will need to answer a medical questionnaire. You may also be asked to provide additional medical information.