Do you need life insurance when taking a mortgage?

When taking out a mortgage in Canada, you may be considering taking out mortgage life insurance or mortgage disability insurance to ensure that your mortgage payments can be made in the event of your death or disability. Both types of insurance can provide valuable protection for you and your family, but whether or not they are necessary depends on your circumstances.

Mortgage life insurance is designed to pay off your mortgage in the event of your death. It is essential to consider if you are your family’s primary breadwinner or have a large mortgage relative to your income. If you have dependents who rely on your income to make mortgage payments, this type of insurance can provide peace of mind that your family won’t be left with a large debt to pay off in the event of your death.

Mortgage disability insurance, on the other hand, provides coverage if you become disabled and cannot work. This type of insurance is critical if you work in a physically demanding job or have a high level of debt relative to your income. If you rely on your income to make mortgage payments, this type of insurance can help ensure that your mortgage payments are made even if you cannot work due to a disability.

When deciding whether to take out mortgage life insurance or mortgage disability insurance, it is crucial to consider your circumstances, including your dependents, your income, and your level of debt. It is also essential to compare the different types of insurance available and choose the one that best meets your needs.

Taking out mortgage life insurance or mortgage disability insurance can provide valuable protection for you and your family in case of death or disability. However, whether or not they are necessary depends on your individual circumstances. It is important to consider your needs and compare the different types of insurance available before deciding.