Unfortunately I don’t – there could be any number of reasons. You can write to the underwriter and ask them to provide your doctor an explanation for why the gentleman was declined for the coverage applied for. Once you determine this, you will then be able to take the next steps in finding coverage for him.

Thanks for your comment – the basic rule of thumb that I go by is this: the more underwriting performed up front, the less chance of denying payout later.

In order to evaluate the cost – effectiveness of the death and disability options, we have to compare the definitions. Often the death and disability product sold on the plans for the mortgages are Accidental Death and Dismemberment not a disability plan – disability plans offer payouts over a long period of time to supplement lost income and to rehabilitate you, whereas an AD&D policy pays out set sums for certain impairments.

Privately – disability plans doesn’t have to be pricey, but that all depends on how you structure it .

Typically, a disability plan compensates you for 66 and 2/3 of your lost salary – you seem to have that already.

I can speak to you privately regarding your specific situation (which is probably favorable).

There are other avenues that you may wish to consider – coverage like Critical Illness can be a very powerful protection for your mortgage as it gives you a big payout when you survive the diagnosis of insured diseases (some which can result in a long term disability).

Also, you may wish to eventually consider solutions for post retirement – such as Long Term Care coverage.

I can only answer your final point from a agent perspective- I don’t know the wording of the bank policy well enough to officially comment on it but typically a disability policy is written on each person’s life – the income would replace their portion – so you would get your income replaced, proportionately.

The mortgage forgiveness programs have allot of fine print written into them, and you would be well advised to read it carefully and possibly consult a professional and have them review it with you.

My situation is that I work for the Federal Government and will receive 70% of my salary if I become disabled. The amout provided by my plan will top up from any government UI or disability insurance program to the 70%.

So should someone in my position consider additional diability insurance?

My own answer before was no. However, in the case where something should happen it would be nice to keep a large percentage of my salary and have my mortgage payments paid off.

And finally, for clarification, as I am a co-applicant, if only I become disabled does the mortgage forgiveness (or however it works) kick in because my wife would still be working full time?

Actually I believe we are speaking about different things. The comparison I am making is between life insurance policies underwritten by our banks here is Canada in comparison with the life insurance policies underwritten by the life insurance companies.

The post was taken from literature I obtained from a life insurance company. I filtered out the bias and tried to demonstrate the key differences between mortgage insurance offered by Canadian banks and Canadian Life insurance companies without a bias slant.

In terms of the ability to lend money, I cannot intelligently make the comparison between banks and other lending institutions because I am not trained in those matter.