How does the life coverage work?
An approved mortgage life claim generally pays the eligible insured balance to the lender. The benefit is usually a one-time debt payment and is not designed to replace ongoing household income.
Health questions, age limits and exclusions apply according to the certificate.
How does mortgage disability coverage work?
Mortgage disability insurance usually pays a monthly benefit toward the mortgage after a waiting period. The borrower must meet the policy definition of disability, provide medical evidence and remain eligible during the claim.
Benefits may have a monthly cap, maximum payment period and exclusions for pre-existing conditions. They may not cover every household expense.
How is it different from personal disability insurance?
Personal disability insurance is designed to replace a portion of income and can help with mortgage payments plus other costs. Mortgage disability coverage is narrower and is commonly paid to the lender.
Employer long-term disability coverage may provide another layer, but definitions, benefit percentages, offsets and waiting periods vary.
What should borrowers compare?
Compare the disability definition, own-occupation or any-occupation wording, waiting period, monthly maximum, benefit period, recurrence rules, exclusions and treatment of self-employment.
Review life and disability premiums separately. A bundled sales presentation does not mean the benefits have identical eligibility.
