Committing to a mortgage is often one of the biggest investments Canadians make, so it makes sense to protect it, especially if anything should happen to you. But what about if you move, have a change of life situation, need permanent life insurance or want to choose your own beneficiaries? That’s where CAA’s Better Mortgage Protection is different.
Unlike traditional mortgage insurance, CAA Protect’s Better Mortgage Protection is not only flexible – but the amount of coverage you need is what is underwritten when a policy is bought.
CAA Magazine sat down with Jarrett Thompson, CAA North & East Ontario’s Managing Director of Insurance to get the details.
Every homeowner wants to protect their investment, so they consider mortgage insurance. But CAA Protect offers something called Better Mortgage Protection. What is the main difference?
With traditional mortgage insurance, you choose the amount of coverage – say it’s $500,000 – but as you pay down the mortgage, the amount of coverage also declines. With Better Mortgage Protection, it stays the same. That $500,000 is the amount that’s underwritten from the start, so no matter how much is left to be paid on your mortgage, your coverage is intact. That means when a claim is made, you are assured that your family is guaranteed the benefit.
What about the actual premiums you pay monthly? With traditional mortgage insurance, they can go up as you age, right?
That’s another big difference CAA Protect offers. The premium stays the same for the duration of the policy. In other words, you always know what you’re paying regularly. The other interesting difference is that Better Mortgage Protection can be 30% to 40% less than traditional lender mortgage insurance, depending on your age and other factors.
So what would a starting monthly premium look like?
Payments can be as little as $24.98 a month*. For most people, that’s a significant savings compared to lender mortgage insurance. Most lender mortgage insurance comes in at around $49 a month, and of course, with CAA Protect, you also get a free will kit and membership to Maple, an online health service.
In other words, Better Mortgage Protection is life insurance for your mortgage?
Exactly. Better Mortgage Protection is actually life insurance. Unlike traditional mortgage insurance, which names the bank that holds the mortgage as the beneficiary, you choose your beneficiaries. They receive the full amount to pay off the mortgage balance, cover debts or simply for replacement income at a time they need it most. Traditional mortgage insurance dictates what the money is used for, whereas Better Mortgage Protection coverage can be used in many ways.
That’s a big difference. But there’s another benefit to Better Mortgage Protection that people don’t consider when they’re insuring their mortgage.
That’s right. As a life insurance policy for your mortgage there are no taxes when the policy is a claim is made. The payout can be used to clear a mortgage, funeral expenses and other debt.
Okay, so you have a mortgage, you have Better Mortgage Protection and you're all set. What if you move or switch lenders?
Great question. Because it operates like life insurance, it goes with you. You don’t need to renew, change policies or start over. If you move or change lenders, you take your protection with you and the coverage remains intact.
Worse case scenario: You go through a major life change and separate or divorce. What happens to the policy in that case?
Better Mortgage Protection policy can be adapted to your changing circumstances in a few ways. There’s also a built-in unique divorce or separation option. If your relationship situation changes, both parties can change to individual policies and are each entitled to 100% of the sum insured.
Going back to the idea that this is life insurance of your mortgage, how flexible is it? Can you extend it or change it at all?
Absolutely. You get to decide how long your coverage lasts. Once the term expires, it can either renew automatically or you can choose to convert to permanent life insurance, with no additional medical tests.** What’s more, you have the flexibility to add term life, disability and critical illness coverage to take care of the unexpected in life.
Finally, how do we sign up?
Super easy. Call 1-800-709-5809 or email [email protected]
*Female, age 32, non-smoker, with regular health, $350,000 coverage with a 25-year term
**Certain exclusions and terms and conditions apply. Have a question? To speak to a professional who can guide you to the right coverage from the right insurer at the right price call us at: 1-800-709-5809 or email us at [email protected]