Mortgage loan insurance

The importance of protecting what's important to you!

Here is a list of the most frequently asked questions from clients of Paul St-Jacques, Financial Security Advisor at IA Financial Group. The questions raised relate to mortgage life insurance and disability insurance.

Who receives the benefit in the event of death or in the event of a disability or critical illness claim? 

It is always the beneficiary named in the contract and not the lending institution. The beneficiary is free to pay off the most expensive debts in interest first and pay off the mortgage later if they wish. 

Whereas with the lending institution, they will simply pay off the entire mortgage (in other words pay themselves first unfortunately). 

This adds to the great flexibility of the mortgage insurance product taken out with the insurance company!  

Regarding the disability claim, with insurance companies, people can customize it by including all their other monthly financial obligations such as car debts, line of credit, etc. With banks or credit unions, this option is simply just not possible as only the monthly mortgage payment will be covered. 

In relation to the critical illness claim, we can also personalize it by including the volume of insurance that the clients want according to their needs, as well as the term or having a level or decreasing protection. My role is to help them choose the best coverage according to their budget and their current situation. 

What happens to the mortgage insurance if I change lending institutions?

With private insurance not related to the mortgage, this does not change anything because it is completely independent of the mortgage. However, if you had taken out the insurance with the lending institution, it is cancelled if you do not renew with the same bank or credit union. 

Another point not to be overlooked is if your health condition deteriorates during the mortgage. 

As we already know, it is good health and good habits that buy the insurance, but if this deteriorates and the client has taken out the mortgage insurance with the bank or credit union, then he will feel stuck with them without having any real negotiating power with other institutions

Can we customize it to our needs and personal situation?

Yes, with me as your advisor, we can absolutely customize it to have the right protection that meets your budget and needs. It becomes consequently less expensive for a better-quality product. With lending institutions, unfortunately, we cannot personalize it and the coverage is simply based on the mortgage balance and the monthly payment.

Is the life insurance coverage level or decreasing?

Again, we indeed have the option to "level" it, and for the minimal price difference, it is often worth investing a little more per month for the fixed option. This can mean on average a difference of only about $20 to $30 per month more (this will depend on age and volume of insurance).

Is the premium guaranteed despite a potential increase in interest rates?

Yes, at renewal, since the mortgage insurance contract is independent of the loan from the lending institution, the premium remains level and guaranteed for the duration of the contract. This has a great advantage and gives a lot of negotiating power at each renewal of the mortgage contract.  

In conclusion, with a financial security advisor, the protection becomes flexible, customized, complete and affordable. In addition, the advisor will be able to support you in the long term if your family or financial situation changes or if you purchase several other properties in the future.

Paul St-Jacques, Financial Security Advisor

My name is Paul St-Jacques and I have been a financial security advisor since 2006 with iA Financial Group. With my years of experience, I have realized that people often need advice and guidance regarding their personal insurance portfolio (life, disability, critical illness, mortgage) as well as their overall investment portfolio (RRSP, TFSA, RESP, NON-RRSP). It is a great pleasure to accompany them in these matters.

I do my work with great passion and integrity, and I build long-term relationships with my clients. My mission is to help them create wealth while protecting their assets and being available, proactive and staying up to date of course on skills, news and economic updates. 

Specifically, about mortgage insurance, it is always much more advantageous to take this product with an insurance company versus the lending institution. 

I often make the following analogy with my clients:

‘When we go out to eat with the family in an Italian restaurant near our home in Lachine. I will inevitably choose a plate of pasta and not a plate of sushi because it is their specialty!’

This is also true for financial products. It is to your advantage to take out an insurance product with an insurance company, because that is really their strength and specialty!