What is Mortgage Critical Illness Insurance?
Mortgage Critical Illness insurance pays out the outstanding balance on your mortgage, whether you can work or not, if you are diagnosed with a covered critical illness.
How does Mortgage Critical Illness Insurance Work?
Here’s an example of how Mortgage Critical Illness Insurance works:
Should he ever experience a serious illness such as heart attack, stroke, or life-threatening cancer, Salim wants to know that all or most of the outstanding balance on his mortgage would be paid off, especially since he is the main wage earner in his family.
As a result, Salim applies for Mortgage Critical Illness Insurance from his financial institution; and after answering a few health-related questions, is approved for coverage.
Eight years later, Salim is diagnosed with cancer and is unable to work. His Mortgage Critical Illness Insurance then pays off the balance of the mortgage on the family’s home.
Salim’s family members are devastated by his cancer diagnosis, but relieved that they do not have to worry about making ongoing mortgage payments during this stressful time. The insurance coverage not only eliminates the family’s largest monthly bill, it also frees up much-needed money to use for health-related expenses such as private nursing care, physical therapy, medical equipment, child care and babysitting services, and modifications to the home.
It may take several years before Salim recovers, but his Mortgage Critical Illness Insurance allows him and his family to remain in their home without worrying about having to make mortgage payments.
Is there a limit on the amount of Mortgage Critical Illness Insurance I can buy?
Most Mortgage Critical Illness Insurance plans cover up to $500,000 per mortgage or $500,000 for all mortgages combined. All insurance coverage is subject to the terms and conditions outlined in the applicable certificate of insurance which you will receive upon approval of your application.
Are there any conditions for approval?
In most cases, you only have to answer a few health-related questions and no medical examination is required. If you answer ‘No’ to the health-questions and your mortgage is below a certain limit (usually $300,000 or less), you’re typically approved. Answering ‘Yes’ to any of the health questions does not necessarily mean you won’t be approved; it simply means the insurer will contact you for more details.
Can more than one person apply?
Mortgage Critical Illness coverage is usually available for up to two borrowers on the same mortgage.