Ontario Blue Cross ‘Mortgage Plan’ advantages and use
Wednesday, October 14th, 2009
The Ontario Blue Cross mortgage plan is an excellent disability plan as a stand alone.
Life insurance is not required to get at the disability insurance, and the benefit period can be up to the amortization of the mortgage. Normally plans limit to 12 to 24 months, but not the Blue Cross mortgage plan!
How would this be integrated into a disability program?
Well, here is how I would look at this option as an addition to a disability program.
Let’s say you are an employee, and you do not pay the full premium for the disability insurance at work. This means the benefit would be taxable. Let’s also assume the benefit is 66.7% of your usual pay.
Therefore, after tax, your paycheque is cut in half. Doing the math, would this leave you short an amount approximately equal to the mortgage payment or a good portion? If the answer is ‘yes’ then the mortgage plan should be considered, as a means to bring you back to pre disability earnings.
For details on the plan, please click Brochure Mortgage Plan.
Another nice feature is that only one of the two borrowers is required to apply, not both if not required. So, if a spouse has adequate coverage elsewhere, but the other does not, we can fill the gap for the spouse without proper disability coverage. Saving money with this plan is possible because of it’s flexibility.
Many mortgage plans at the banks will:
- force you to take the life insurance to get at the disability option
- cover off only 12 to 24 months of payments not the full term
- have other long waiting periods and other restrictions
- have limited underwriting leaving you wondering if you are ‘truly’ insured
With the Blue Cross Mortgage plan, leave those worried behind! You are fully underwritten up front to alleviate worry, and can have full coverage for a lengthy disability. With bank plans only covering off 24 months, you might as well start packing, as often the plan gives you time to readjust, but not stay in your home.
Insurance planning is all about ‘being okay’ financially if you become disabled, or if you should die. Looking at income before and after a disability is the only sure way to determine if your plan is adequate.
Sound too good to be true? I knew you would think that. So, here’s the contract wording so you can fine-tooth comb it to ensure it is what we say it is!
Please call us at 1.866.856.6799 to discuss this further.
