There are two types of mortgage insurance benefits: mortgage life and mortgage disability insurance. These mortgage insurance policies provide protection to Canadians who, due to illness or death are unable to make their mortgage payments. These policies either pay off the mortgage in its entirety or pay monthly mortgage payments for a defined period of time.
These mortgage insurance policies are most often sold at the time the mortgage is negotiated with a bank or financial institution and payments are generally made to the bank or financial institution when the mortgage insurance claim is approved.
Mortgage disability claims can be denied because, like a more conventional disability insurance policy, the insurance company does not accept that you are not able to work as defined under the policy.
In the case of both mortgage life and mortgage disability claim denials, the claims are denied due to coverage disputes over allegations of misrepresentation at the time the policy was purchased.