June Jell will never forget the time she and her husband John sat down with their agent and turned

mortgage insurance down flat. Six months later, he died suddenly of a heart attack at the age of 59,

leaving her struggling to keep up with house payments.

While she got back on her feet eventually, it wasn't without sacrifices along the way -- including the family


Now she tells everyone she knows, "If you can get it, take it. We thought mortgage insurance was

expensive at the time and because of our age, believed we could handle everything."

In retrospect she realizes, "It really wouldn't have been that expensive after all. It would have been a


Insurance of any kind is one of those things people like to put on the back burner or do without. "A lot of

homeowners don't want to add the cost of insurance to their mortgage payment," says Feisal Panjwani, a

senior mortgage consultant with Invis Inc. in Surrey.

"One of the biggest mistakes they make when they sign their mortgage is declining insurance, thinking

they will research it on their own. Nine times out of ten they don't get around to it. Then when something

goes wrong, it's too late."

It's not surprising that some homeowners balk at mortgage insurance, especially when they feel they are

already stretching their monthly payments to the maximum.

Especially in these economic hard times, however, you can't afford to be without it, says Jennifer Hines,

vice-president of creditor insurance for RBC Insurance in Mississauga, Ont.

"Clients at all stages need to make sure their mortgage is protected. Some have life and disability

insurance, but the family still could be left holding a debt on what tends to be a person's largest individual

debt obligation."

The ideal time to look at options is when you do your mortgage application. The most common are

insurance tied to the mortgage itself, or to the lender.

Tying insurance to a mortgage balance is usually preferred since you can switch lenders and keep the

same policy. This reduces the risk of facing higher premiums or finding out you are uninsurable when you

reapply at another bank, Lorne D. Greenwood, a real-estate lawyer based in Milton, Ont., advises.

"Getting insurance through an independent broker to cover the same amount means you won't have to requalify

with each mortgage," Greenwood says. This also is a good choice when your mortgage balance

decreases and you want to reduce your premiums.

Panjwani notes that it's especially important for first-time or younger buyers to get coverage because the

mortgage balance is high, insurance premiums tend to be in their favour, and medicals are not generally


For those who think their disability and life-insurance policies are enough if things go wrong, that may not

be the case, warns Hines.

"Typically disability policies will only pay 60 to 70 per cent of your monthly income, so there is still a gap.

You still need coverage for other expenses. We tell people it doesn't have to be an either/or situation. We

also suggest they consider whether they need to top up what they have, so they don't have to be

concerned about mortgage payments in the event of a death or disability."

© Copyright (c) The Province By Denise Deveau, For Canwest News Service - April 1, 2009

Constantine Isslamow

Constantine Isslamow

Broker of Record
CENTURY 21 United Realty Inc., Brokerage*
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