A Guide on the Manulife Mortgage Protection Plan

Posted on March 22, 2021

Did you know that, according to Canadian Mortgage Trends, the number of homeowners in Canada who had mortgages in 2020 was 6 million? This is a large number, considering that the total number of homeowners in Canada that year was 9.91 million.

If you’re planning on becoming a homeowner with a mortgage, then you’re probably reading many mortgage protection insurance reviews.

You might be considering the Manulife Mortgage Protection Plan, in which case you might have questions such as:

“What is the Manulife Mortgage Protection Plan?”

“What are the pros and cons of this plan?”

“What are the details of this plan?”

If you don’t have the answers to these questions, then you might not be sure about getting Manulife mortgage insurance. How can you know if it’s the right mortgage protection plan for you?

That’s why we’ve put together this review.

The Details of the Manulife Mortgage Protection Plan

In this section, we’ll cover the details of the Manulife Mortgage Protection Plan. First, let’s review the features of this mortgage insurance plan.  A major selling factor for most, is that this plan comes with life and disability insurance; although the disability insurance is optional.

The max term is 70 years when it comes to life insurance. As for disability insurance, the max term is 65 years.

The benefit is paid to the lender instead of to your beneficiary or beneficiaries. In terms of renewability and conversion, this plan isn’t renewable or convertible.

How about whether the coverage can increase or decrease if the mortgage amount increases or decreases?

This depends, as it’s up to your lender. If this is something you think you might want to do, speak with your lender before signing up for this plan.

More About Manulife

When you’re considering a mortgage protection mortgage insurance plan plan, it’s important to know about the insurance company itself. Manulife—actually called The Manufacturers Life Insurance Company—is the largest life insurance company in Canada.

In terms of assets, they have more than a trillion dollars.

This company was founded in 1887 by Canada’s first prime minister. This historic company has since then continued to make history.

They were the first insurer in Canada to provide life insurance to customers who were HIV-positive. They also invest in many sustainability initiatives and do an excellent job of creating gender balance in their management.

Mortgage Insurance with Manulife

Manulife’s mortgage insurance is the Manulife Mortgage Protection Plan. If you unexpectedly die or become disabled, this mortgage protection plan ensures that your mortgage payments will be able to continue. There are two options available with this plan: life protection and disability protection.

Life Protection

Life protection is the basic feature of the Manulife Mortgage Protection Plan. If you, unfortunately, pass away, Manulife will pay off the balance left on your mortgage. There are maximums when it comes to this amount.

You also get a Bridge Benefit with the life protection that comes with this plan.

While the claim is being reviewed, they’ll continue to make the payments throughout the interim period.

The Benefits

There are different benefits you get with the life protection insurance element of the Manulife Mortgage Protection Plan. The first is that coverage can start as soon as you need it to. This is because there isn't a waiting period for receiving it.

Why is there no waiting period? This is because you get mortgage insurance offered to you by your lender.

Additionally, when it comes to your budget, there are many different payment options. These include weekly, semi-monthly, and monthly.

This can be a relief for many people who are already buying a home and worried about making their mortgage payments on top of other payments.

Also, if you ever need it, topping up the coverage you have currently is easy. If you have other priorities, you can keep your current coverage.

You may be worried about whether your coverage changes if you switch jobs.

Fortunately, with the Manulife Mortgage Protection Plan, you stay covered, even if you switch jobs. This means that you can continue to move forward in your career without having to worry.

There's also a 60-day moneyback guarantee. This is a great reason to sign up for this plan. You can try it out, see if it suits you—and if it doesn't, you'll get your money back.

Disability Protection

Disability protection is not a basic feature of this mortgage protection plan. It’s an addition that you have to pay for. If you end up disabled (this means for 60 days or longer), Manulife will pay for your mortgage.

There are also limits when it comes to this amount.

Let’s say you recover from your disability. In that case, while you’re disabled, Manulife will pay for your mortgage. Then, once you’ve returned to work, they’ll cover one extra payment.

The Benefits

The benefits that come with disability protection are the same as for life protection. The most important of these to be aware of is that you're covered if you switch jobs and that you have a 60-day moneyback guarantee.

Keep in mind, however, that you will only get coverage (as mentioned above) for complete disability if you've already had the plan for 60 days or longer. In this case, the 60-day moneyback guarantee wouldn't be as useful for you.

Coverage and Terms

In terms of life insurance coverage, the maximum amount that Manulife will pay out per person is $1 million. As for disability insurance coverage, the maximum Manulife will pay out per person is $10,000.

This is over a period of 24 months. Note that the benefit that’s paid out will be the lower of the debt remaining and the maximum benefit amount.

So what does that look like? For example, let’s say you get the Manulife Mortgage Protection Plan and your coverage amount is $1 million.

If the remaining amount left on your mortgage is $90,000, then Manulife will pay out $90,000 instead of $1 million.

As for when the coverage ends, this is based on what happens sooner.

With the life insurance coverage, either you have an unfortunate untimely death before you turn 70, or your coverage ends at 70.

As for the disability coverage, either you end up disabled before you turn 65, or you stop being covered when you turn 65.

For both life insurance and disability coverage, this coverage will also stop if you pay off your mortgage before any of the above occur.

When determining whether investing in a mortgage protection plan is a good investment for you, it helps to make some calculations. We recommend using a mortgage protection insurance calculator, like this one.

Additional Benefits or Riders

The biggest benefit available with Manulife mortgage insurance is disability protection. Even though this is a benefit, it is one you have to pay for therefore increasing your premiums. This said, there are two additional benefits you can add to this insurance plan.

Premium Due Waiver (Because of Job Loss)

One of the biggest worries you may have about getting a mortgage is being able to make mortgage payments if you lose your job. If you work in an unstable industry, you might benefit from the premium due waiver.

With the premium due waiver, you’ll be waived for a total of 3 months of paying off your mortgage.

This is if you lose your job (involuntarily) within the first 6 months of the start date with a Manulife insurance policy. You can use this benefit once annually.

Terminal Illness

One of the other unfortunate events in life that can occur is finding out that you have a terminal illness. In addition to being a health and financial concern that has a significant emotional impact, having a terminal illness can have an effect on your ability to make mortgage payments.

That’s why it can be smart to sign up for terminal illness coverage with the Manulife Mortgage Protection Plan.

Through this benefit, you’ll be covered when it comes to mortgage payments. This is only the case if you find out about your terminal illness after 6 months since the start date of your mortgage insurance.

Eligibility

There are certain eligibility requirements if you want to get the Manulife Mortgage Protection Plan. First of all, you must be a Canadian resident, you must be between 18 and 64 years of age. Additionally, there are mortgage requirements.

When it comes to the mortgage requirements, you have to be a guarantor, co-borrower, or borrower. The mortgage must be a residential mortgage.

Even if you aren't eligible for the largest amount of protection, you may be eligible for some protection under this plan.

Manulife Mortgage Protection Versus Term Life Insurance

In this section, we’ll compare Manulife mortgage protection to term life insurance. Let’s start with who the benefit is paid to. With Manulife, it’s paid to the lender. With term life insurance, it’s paid to the beneficiary or beneficiaries of your choice.

In terms of purchase, you’re offered Manulife mortgage insurance coverage once your lender has approved your mortgage. Term life insurance is accessed directly by you.

The free look period for Manulife mortgage insurance is 60 days, and for term life insurance, it’s 30 days.

In terms of maximum coverage, you choose from limits provided when you’re getting term life insurance.

When you’re getting Manulife mortgage insurance, it’s the lower amount out of $1 million and what’s left of your mortgage payment.

The coverage type with Manulife mortgage insurance is reducing, while with term life insurance, it’s level.

Term life insurance usually makes it possible for you to renew and convert your insurance. This isn’t the case with Manulife mortgage insurance.

When it comes to the term amount, this is chosen by the policyholder when you get term life insurance. With Manulife mortgage insurance, the limit is when either you turn 70 or your mortgage payment is paid off.

Looking for more information on insurance products?

Whether you have settled on the Manulife Mortgage Protection Plan, or you still require more information, we at Insurdinary are here to help.  As a leading financial comparison platform, we are able to provide you with the best rates on the market for all types of insurance.  Reach out to us today! Our team of experts are looking forward to working with you!

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