Protecting Your Mortgage Against Disability Risk

Disability is statistically more likely than premature death during your working years. Yet it is the least well-covered risk among most Quebec homeowners. A prolonged disability can threaten not only your mortgage payments but your entire financial stability. Understanding the different protection sources available in Quebec is essential for building an adequate safety net.

Disability protection sources in Quebec

• Lender mortgage disability insurance: covers the monthly payment in case of disability. Common limitations: maximum 2-year duration, 30 to 90 day waiting period before benefits begin, restrictive disability definition (often 'total inability to perform ANY occupation' after 2 years rather than your own occupation).
• Individual disability insurance: replaces 60 to 70% of your gross income. Advantages: possible coverage until age 65, broader disability definition (inability to perform your own profession), portable between lenders and employers, and fixed premium based on your profile at subscription.
• Quebec Pension Plan (QPP): monthly disability benefit if you have contributed enough. Maximum amount is about $1,500 per month, often insufficient alone to cover the mortgage and current expenses. A 4-month delay applies before the first payment.
• CNESST: compensation for workplace accidents or occupational diseases. Replacement of 90% of net income. Automatic coverage for salaried workers in Quebec.
• SAAQ: compensation for automobile accidents. Replacement of 90% of net income. Automatic coverage for all Quebec residents.
• Employer group insurance: several employers offer short-term disability coverage (17 to 26 weeks) and long-term disability (until age 65). Check the conditions and amounts of your current coverage.

Evaluating your coverage gaps

1. Inventory your current protections: List all your income sources in case of disability: employer group insurance, lender mortgage insurance, existing individual insurance, and government benefits (QPP, CNESST, SAAQ depending on the cause).
2. Calculate your monthly needs in case of disability: Add up your mortgage payment, property taxes, insurance, utilities, and basic expenses for your family. Compare this amount to your disability income sources.
3. Identify the gap: The difference between your needs and current protections is your coverage gap. This is the amount you need to fill with additional individual disability insurance.
4. Consult an AMF-certified insurance broker: A specialized broker analyzes your complete situation and recommends optimal coverage based on your profession, health, age, and budget. They compare offers from multiple insurers to get the best coverage-to-price ratio.

An AMF-certified insurance broker, in coordination with your mortgage broker, evaluates your overall protection needs and identifies gaps in your current coverage. This integrated approach ensures that your mortgage and family are protected against disability risk, regardless of the scenario.