Ask the Expert: Should I Insure My Mortgage?

Richard Bell B.A. LL.B.
April 13, 2015

Q: I have put a 33 per cent down payment on my new house, so I'm not obliged to get mortgage default insurance. But my broker is recommending that I take out mortgage life insurance – what’s your advice?

A: Absolutely, yes. Insuring your mortgage payments is very important in case for some reason you are unable to make your payments due to illness, injury, incapacitation or unemployment.

But you really need to be thinking about insuring more than just your mortgage payments. If you are a couple or have dependents, you need to ask yourself what would happen to your loved ones if you were to die or become incapacitated today.

Don’t think about some time in the distant future, think about today. What are your total assets and liabilities and what are the total funds that would be needed in the future to ensure your loved ones are protected? What about university for your children? Will your spouse need to quit work or hire help to take care of the house and children? Would your spouse need to sell the home to make ends meet?

So my advice is to talk to an insurance advisor about all your needs and look at the bigger picture, not just your mortgage debt.

Richard Bell B.A. LL.B.
Richard Bell is a Vancouver lawyer who specializes in real estate, wills and estate planning, probate, and immigration law. He is the co-founder of Bell Alliance Lawyers & Notaries Public and has been named Best Real Estate Lawyer in Canada by Canadian Real Estate Magazine.