Great Reasons to Get Critical Illness Cover Mortgage

by | May 18, 2022 | Critical Illness Cover Mortgage

Critical illness cover mortgage is a combination of life insurance, which pays a lump sum if you die, and critical illness cover, which pays to meet your living expenses if you are diagnosed with an illness. This financial protection can help prepare your loved ones financially for the unforeseen.  

Critical illness cover mortgage is a type of protection for people who are unable to work due to ill-health. It usually covers a monthly payment towards the person’s mortgage and benefits if they become unable to continue working. In some cases, it also covers other household bills as well as funeral expenses and legal fees. For many, this is the only form of sickness benefit. 

Generally, a critical illness cover mortgage protects adults who become unable to work due to illness for at least six months. However, those who are getting state or social security benefits or have other sources of income can continue to claim an amount from the cover mortgage for up to 12 months. It is normally paid by their employer or the government after they have been medically certified as unable to work and will be paid on a fortnightly basis.   

Benefits of Critical Illness Cover Mortgage in Canada

Critical illness cover mortgage in Canada is a legal term that’s used in insurance policies. It means that the bank must pay out your mortgage if you die as a result of an accident caused by your own fault. Or the fault of another person because the death was not covered by other health insurance. In Canada, there are no mandatory requirements for critical illness coverage. But most banks offer it to their customers. The insurance can only be used for home and car loans. Mortgage lenders will also allow you to use your life insurance payout as a down payment for your new home.  As well as a cushion to pay back the remainder of your loan, if you are unable to. 

Critical illness is any disease that is covered by your health insurance. In Canada, the most common illnesses that are covered are cancer, heart disease and stroke. The coverage is paid out directly to the mortgage lender and not generally to the insured individual. The insurance is sold to the bank by a special insurance company. The amount of coverage is based on the financial situation of the insured individual. When you buy critical illness cover, you may be paying for a policy that covers only you and your spouse. Or one that covers both spouses or even a large number of adults and children.

Meet The Following Criteria For Critical Illness Coverage:

The premium for critical illness coverage is usually around $25-$50/month. It will be higher if you have a family policy. Mortgage lenders may not offer this type of insurance because it doesn’t cost them much to offer it. Critical illness insurance policies are controversial because there is no universal agreement about who will pay the policies out to whom. If the insured individual meets one of the conditions that would warrant a payout from the insurer.