Mortgage Life Insurance In Alberta: Understanding Riders on Mortgage Disability Insurance

There are not a lot of varieties when it comes to mortgage insurance products. There is mortgage life insurance to make sure that your home loan will be paid on the event of your death. This can be either decreasing term or fixed term, depending on the kind of mortgage you have. There is mortgage disability insurance, which will guarantee that your mortgage payment will be made in case you are disabled and unable to work.

But in addition to the plain vanilla variety of mortgage insurance products, buyers have some choices about the full nature of their policy.

First make sure you understand whether you have picked a partial disability policy, with a predefined amount or a residual policy, with an amount based on current salary.

You may have the choice between short term disability insurance in which the policy will cover a maximum term of, for example two years. This is usually a policy for a homeowner who has another policy that would kick in at a later age.

There are also a lot of riders that will be offered to a policy purchaser. These include inflation protection, guaranteed future insurability, guaranteed renewable policy, non cancelable policy or waiver of premium.

Inflation Protection

With this rider, inflation is factored into the benefit, so that your disability receipts, for example, will go up as the cost of living increases. A rider such as this prevents your disability payment from becoming inadequate should inflation pick up.

Guaranteed Future Insurability

A rider such as this will let the policy holder increase the amount of the policy if the value of the house grows, without having to reapply for the mortgage insurance.

Guaranteed Renewable Policy

As long as premiums continue to be paid, the policy will be renewable, although premiums may be increased to maintain the same coverage.

Non-Cancelable Policy

This rider will renew the policy and also will protect the premium from increase.

Waiver of Premium

Once you start collecting a benefit, the premiums are no longer payable if you have this rider. This means that when you are disabled, you will not have to continue paying the premiums on your mortgage disability policy.