• Skip to primary navigation
  • Skip to main content
CAFII | The Canadian Association of Financial Institutions in Insurance

Making Insurance Simple and Accessible for Canadians

  • Français
| Member Login
  • Français
  • Insurance
    • Close
    • Insurance
    • Mortgage Disability & Critical Illness Insurance
    • What is Travel Insurance?
    • What is Life Insurance for Personal Loans and Lines of Credit?
    • What is Disability Insurance for Personal Loans and Lines of Credit?
    • What is Credit Protection Insurance?
    • What is Mortgage Disability Insurance?
    • What is Travel Medical Insurance?
    • What is Credit Payment Protection Insurance for Personal Loans?
    • What is Credit Card Insurance?
    • What is Mortgage Life Insurance?
    • What is Mortgage Critical Illness Insurance?
    • What are Trip Cancellation and Trip Interruption Insurance?
    • What is Critical Illness Insurance for Personal Loans and Lines of Credit?
    • What is Job Loss Insurance?
    • Other Insurance
    • Close
  • Tools & Resources
    • Close
    • FAQ
    • Enquiries and Complaints
    • Helpful Links
    • How To Make A Claim
    • Close
  • About CAFII
  • News & Events
    • Close
    • News
    • Events
    • Close
  • Research & Insights
    • Close
    • Research
    • Insights
    • Close
  • Contact Us
Mortgage Disability Insurance

What is Mortgage Disability Insurance?

Mortgage Disability Insurance covers your ongoing mortgage payments for a specified period of time should you become disabled due to illness or injury that prevents you from performing the regular duties of your occupation prior to your disability’s manifestation. It is typically purchased with Mortgage Life Insurance.

How does Mortgage Disability Insurance Work?

Here’s an example of how Mortgage Disability Insurance works:

When Patricia arranged a mortgage to finance the purchase of her new home, she was worried about how she would be able to make the monthly mortgage payments and keep her house if she became temporarily disabled due to an injury that prevented her from working.

She was concerned because she had little savings left after making her down payment on the home, and did not have any type of disability insurance in place already.

So when Patricia learned that she could secure Mortgage Disability Insurance at economical group rates from the financial institution that provided her mortgage, she decided to do so.

Several years later, Patricia was seriously injured in a car accident and could not work for nine months. However, after a short waiting period, Patricia’s Mortgage Disability Insurance kicked in and began making her $2,500 monthly mortgage payments. As result, Patricia was able to remain in her home without making mortgage payments until she fully recovered from her injuries and was able to return to work.

What period does a Mortgage Disability Insurance benefit cover?

Your mortgage payments will be covered after an initial waiting period (usually 60 days after you are diagnosed) and will continue until you go back to work or until you reach a designated maximum period of time – usually 24 months. This insurance will pay a maximum monthly benefit plus the disability insurance premium (including provincial sales tax) for your mortgage.

What does Mortgage Disability Insurance cost?

The cost of Mortgage Disability Insurance is determined by your age at the time of application, and the amount of your regular mortgage payment (including principal and interest). Mortgage Disability Insurance is sometimes sold as part of a product bundle that can include Mortgage Life Insurance, Job Loss Insurance and/or Critical Illness insurance. All types of credit protection insurance coverage, including Mortgage Disability Insurance, are provided under a group policy rather than being individually underwritten. This means more Canadians can be insured at economical standard group rates.

Is there a maximum monthly benefit amount that will be paid?

The maximum monthly benefit payable per mortgage will vary according to the terms of your policy, but the maximum will usually be in the range of $3,000 to $3,500 per month.

Who can apply for Mortgage Disability Insurance?

Residents of Canada between the ages of 18-64 who actively work a minimum of 20 hours per week for wages or the expectation of profit are usually eligible for Mortgage Disability Insurance.

Do I need to answer health questions to get Mortgage Disability Insurance?

Yes, you usually have to answer a few health-related questions. If you answer ‘No’ to the health questions you’re usually approved (although there are exceptions for when your mortgage is above a certain threshold that the insurer will contact you for more details). 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 in order to properly assess the risk.

Where do I get Mortgage Disability Insurance?

A number of banks and credit unions in Canada, including most CAFII member financial institutions, offer Mortgage Disability Insurance. Employees at CAFII member institutions are trained and knowledgeable about the products they sell, and can be conveniently reached in branches or at call centres. You can find a list of CAFII member institutions at: https://members.cafii.com/index.php/members_voting.

CAFII | The Canadian Association of Financial Institutions in Insurance
  • Insurance
  • About CAFII
  • News & Research
  • Tools & Resources
  • Contact Us

Privacy & Security | Terms Of Use | Accessibility | Canadian Association of Financial Institutions in Insurance, © 2023