Overview
Job loss mortgage insurance in Canada is an optional form of creditor insurance that helps cover your mortgage payments if you involuntarily lose your job. This protection is designed to provide temporary financial relief so you can keep up with your mortgage while you seek new employment. Coverage terms, eligibility, and benefit amounts vary by lender and insurance provider.
How Job Loss Mortgage Insurance Works
- Purpose: Covers mortgage payments if you lose your job through no fault of your own.
- Eligibility: Typically available to borrowers with full-time employment; may not be offered to self-employed or contract workers.
- Benefit Period: Usually pays a monthly benefit for up to 6 months per claim, with a lifetime maximum, depending on the provider.
- Waiting Period: Most policies have a waiting period (often 30–60 days) after job loss before benefits begin.
- Exclusions: Voluntary resignation, termination for cause, or job loss within a short period after taking the insurance (e.g., 90 days) are generally excluded.
Major Canadian Bank Offerings
Comparison Table: Job Loss Mortgage Insurance by Provider
| Bank/Provider | Monthly Benefit Limit | Max Benefit Period | Waiting Period | Lifetime Maximum | Key Exclusions |
|---|
| Scotiabank | $3,500 | 6 months/claim | 60 days | 12 months | Voluntary quit, seasonal |
| BMO | $3,500 | 6 months/claim | 60 days | Not specified | Voluntary quit, seasonal |
| CIBC | $6,500 | Not specified | 30 days | Not specified | Voluntary quit, self-employ. |
| Manulife | $3,500 | 6 months/claim | Not specified | 1 claim/2 years | Voluntary quit, age capped |
- Scotiabank: Coverage up to $3,500/month for up to 6 months per job loss, with a 12-month lifetime maximum. 60-day waiting period applies.
- BMO: Covers up to $3,500/month for up to 6 months, after a 60-day qualifying period. Excludes job loss within 90 days of policy start, voluntary resignation, or seasonal layoff.
- CIBC: Offers up to $6,500/month after a 30-day waiting period. Available if you lose your job through no fault of your own, or—if self-employed—your business closes for uncontrollable reasons.
- Manulife: Provides $3,500/month for up to 6 months per job loss. Can claim only once every two years, with coverage ending at age 65.
General Policy Features
- Add-on Coverage: Job loss insurance is usually available as an add-on to life and disability mortgage insurance.
- Group Coverage: Not typically sold as a standalone policy; often part of a group creditor insurance plan offered through your lender.
- Claims: You must submit documentation proving involuntary job loss and meet all eligibility criteria to receive benefits.
Provincial Considerations
- Regulation: Insurance products and licensing are regulated at the provincial level, so specific terms and availability may vary by province.
- Quebec: Product documents are often available in French and may have unique consumer protection rules.
Government Programs & Alternatives
- Employment Insurance (EI): Federally provided EI may offer temporary income replacement, but job loss mortgage insurance is a separate, optional private product.
- Mortgage Deferral: During economic downturns, banks sometimes offer deferral programs; these are not insurance, but temporary payment relief.
Actionable Next Steps
- Compare Offers: Check with your lender or insurer for specific terms, costs, and eligibility.
- Review Exclusions: Carefully read policy documents for waiting periods, claim limits, and exclusions.
- Bundle Coverage: Consider if combining job loss, disability, and life coverage suits your needs.
- Consider Alternatives: Evaluate if your savings or other insurance could provide similar protection.
For the most comprehensive comparison of rates and mortgage protection options from top Canadian lenders, use theratefinder. Their multi-step application process helps you find the right coverage and mortgage solution. Start your personalized application at theratefinder.ca/onboarding.
Summary
Job loss mortgage insurance can provide valuable protection for Canadian homeowners by covering mortgage payments temporarily after involuntary job loss. Coverage limits, waiting periods, and exclusions differ by provider, so review details closely before enrolling. Always compare options and consider your overall financial plan to ensure you have the right protection for your needs.