The mortgage protection bundle brings everything together

The product strategy relies on the principle of having a reserve of money to provide protection for three risks – becoming disabled, having a critical illness, or passing away prematurely.

It is designed for those who have a mortgage, debt load or just want enhanced protection for their family at a substantial discount over the same products sold separately. It is particularly attractive to most people who have their mortgage insurance through an existing financial institution like a bank or credit union.

What is important is the disability benefit and critical illness products in this bundle are fully featured plans. The critical illness, for example, covers 22 illnesses, not the three to five covered in most of the mortgage insurance products offered by the banks. The disability payments cover you if you cannot do your regular occupation. Bank mortgage products cover you for only two years while the mortgage protection bundle provides up to 16.6 years of disability payments.

The risks of disability or critical illness are much higher

The following table shows that the probability of dying before age 65 is only between 5.2% and 7.0% (female and male) while the probability of having a critical illness or disability claim prior to age 65 is between 52.5% and 59.3% (female and male) yet few people have insurance to cover these risks. That is why the mortgage protection bundle strategy is an important consideration.

Risk probability for men, age 40, non-smoker

Disability before age 65

Critical illness before age 65

Dying before age 65

Critically ill or disabled before age 65

Risk probability for women, age 40, non-smoker

Disability before age 65

Critical illness before age 65

Dying before age 65

Critically ill or disabled before age 65

Introducing Synergy from Manulife Insurance

The product does a great job of covering the three significant risks. The first two (disability and critical illness insurance) are most common, and there is a better than 50% chance you will experience one of them by the age of 65. These policies pay you the benefit. It was designed to provide sufficient insurance to cover most mortgage payments, not for two years like bank insurance, but up to 16 years if you cannot do your regular occupation. This alone is a considerable advantage over bank and group disability insurance.

Similarly, if you have a critical illness, numerous uncovered costs and lump sum payments are so welcomed. Some costs would include transportation and parking, uncovered drugs and medications, and enabling a spouse to take a leave of absence or time off just to there. It covers 22 illnesses, unlike the three to five covered by bank and group critical illness policies.

While it is limited to $500,000 of life in the package, we can add affordable term life insurance riders to the policy to fully cover the risks of dying.

  • You are protected for all three risks: life, critical illness and disability insurance that provide you with a better, value-added mortgage balance protection solution.

  • You own the Synergy solution and name your beneficiary. If you become disabled before age 65 and can’t work, you receive a monthly benefit to help replace your income and maybe more than your mortgage payment.

  • If before age 65 you are diagnosed with one of the 22 defined covered conditions, you receive a lump sum benefit to use however you want.

  • In the event of death before age 65, the life insurance benefit goes to your beneficiary to use however they want.

Protect yourself, start by getting some quotes

When it comes time to secure a mortgage, the bank will tell you that you need to buy mortgage insurance, critical illness or disability insurance, or all of it to cover your mortgage, not you. What the bank is asking you to do is protect their company. The coverage is designed as creditor protection, and the benefits only go to pay off any remaining mortgage balance – no matter what other needs you may have.

With most banks’ mortgage insurance: you are part of a group policy owned by the bank, underwritten by an insurance company, and the bank is the beneficiary. The death benefit goes directly to the lender to pay off the mortgage, so your family has no say on how the fund is distributed.

We recommend you start this process by getting some quotes. You will have an opportunity to review the quotes and decide how they fit your overall budget. Once you have some ideas, our advisors can complement the process by providing more information to help you shape your decision.

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