Manulife Mortgage Protection Plan Review 2021 - PolicyAdvisor
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Manulife Mortgage Protection Insurance Review

SUMMARY

Manulife Mortgage Protection Plan will assist in covering the mortgage in the event of your death or disability. Coverage options include $1 million (or the balance of the mortgage, whatever is lesser) and up to $10,000 per person for 24 months of disability insurance coverage. This plan offers less flexibility and options compared to a standard term life insurance policy, at a higher cost

By Diarmuid Shiels
Insurance Advisor, LLQP
7 min read
IN THIS ARTICLE

Buying a home is a significant milestone in one’s life. While navigating the process of setting up your mortgage, you are often offered mortgage insurance by your lender. Manulife Mortgage Protection is one such policy.

Is it worthwhile to purchase this type of coverage? Let’s find out!

This Manulife Mortgage Protection Plan Insurance review includes our ratings as well as details about their terms and coverage.

Head here for more details about mortgage insurance and mortgage protection.

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PolicyAdvisor strongly recommends choosing individual term life insurance instead of a lender provided mortgage protection policy. This advice remains the same whether the policy be from Manulife or any other source. With term life insurance, the amount would be paid out to the beneficiary(ies) you choose, (in most cases, your loved ones). This ensures you have adequate coverage in place to cover not just your mortgage, but also any other liabilities and also provide security to your family in case of your unexpected death.

Term life insurance is generally significantly less expensive in the long term. You can ladder your insurance policy so that the coverage decreases as you pay off your mortgage and other debt obligations. As your coverage decreases, so do your premiums.

Another important factor is flexibility – term life insurance has options for riders and benefits to customize your policy and extend coverage to your spouse and children. And, the coverage remains in place even if you switch mortgage lenders.

Lastly, If you prefer the Manulife brand, Manulife offers term life coverage up to $20 million and term up to age 100 through their Family Term policy among many of their other life insurance options.

Product

Mortgage Protection

AM BEST RATING

A+

POLICY ADVISOR RATING

Not Recommended For Canadian Life Insurance Buyers

Pros

  • Backed by the Manulife brand

Cons

  • Lower coverage limits compared to individually purchased insurance
  • Limited coverage terms available
  • Claim paid out to mortgage lender, not to your beneficiaries
  • Only covers mortgage, cannot provide security to family/loved ones or cover other obligations
  • Cannot be converted to other forms of insurance
  • Limited options for riders

Who is Manulife?

The Manufacturers Life Insurance Company – but colloquially known and branded as Manulife –  is Canada’s largest life insurance company and holds over a trillion dollars in assets. It was founded by Canada’s first prime minister in 1887; today they are the first Canadian insurer to offer life insurance to HIV-positive customers, strive for gender balance in management, and invest billions in sustainable initiatives.

Does Manulife offer mortgage insurance?

Yes, Manulife Mortgage Protection Plan is a mortgage insurance policy offered by Manulife. It helps cover mortgage payments in the event of your unexpected death or disability.

It provides two options for mortgage protection: life insurance and disability insurance.

Life Protection

This is the basic feature of this policy. In the unfortunate case of your passing away, Manulife Mortgage Protection Plan will pay off your mortgage balance (up to certain maximums). This comes with a Bridge benefit: When a claim is made, payments are covered during the interim period when the claim is reviewed.

Disability Protection

This is an additional paid feature. When you opt for this protection, Manulife Mortgage Protection Plan will pay your monthly mortgage payment if you are totally disabled for 60 days or more (also subject to maximum limits). If you recover and return to work, one extra payment will be made on your behalf.

Manulife Mortgage Protection Plan Product Details

Product Name Manulife Mortgage Protection Plan
Features Life Insurance
Optional Disability Insurance
Max Term Lower of mortgage amortization period and 70 years of age (for life insurance)/65 years (for disability)
Max Coverage Amount $1 MM (for Life) / $10,000 for 24 months (for disability insurance)
Benefit Paid To Lender
Renewability Not renewable
Conversion Not convertible
Increase/Decrease In Coverage With Change In Mortgage Amount May be possible, at insurer’s discretion
Additional Riders and Benefits Waiver of premium due to job loss, Terminal illness benefit
Other Riders None

What coverage and terms does Manulife Mortgage Protection Plan’s insurance offer?

Manulife will provide up to $1 million per person of life insurance coverage and up to $10,000 per person for a 24-month period of disability insurance coverage. The actual benefit paid out will be the lower of the maximum benefit amount and the actual debt remaining.

For example, if you opt for Manulife Mortgage Protection Plan life insurance for a coverage amount of $1 million, but the mortgage balance remaining when the claim is made is $100,000, then Manulife Mortgage Protection Plan will pay out the lower of the two: $100,000.

The coverage ends as per the below time limits, based on whichever happens sooner:

  • When you cross 70 years of age (for life insurance) and 65 years (for disability insurance)
  • The end of the mortgage amortization period
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Does Manulife Mortgage Protection Plan offer additional riders or benefits?

The total disability protection coverage component of Manulife Mortgage Protection Plan is an optional feature which will raise your monthly premium, if chosen.

Besides this, Manulife offers two other benefits:

  • Waiver of premium due to job loss: Your premiums will be waived for 3 months if you (involuntarily) lose your job after 6 months from the insurance start date. This benefit can be claimed once per year.
  • Terminal Illness: If you are diagnosed with a terminal illness 6 months after the insurance start date, mortgage payments will be paid by Manulife (up to the maximum limits mentioned above).

How does Manulife Mortgage Protection Plan compare with term life insurance?

Manulife Mortgage Protection Plan Term Life Insurance
Benefit Paid to Lender Benefit paid to chosen beneficiary
Purchase Offered upon mortgage approval by the lender Directly by you
Free Look Period 60 days 30 days
Maximum coverage Lower of integrated $1 MM (inclusive of all term life and mortgage protection coverage the applicant has) and remaining mortgage amount Policyholder chooses from provider limits
Coverage Type Reducing Level
Renewal and Conversion N/A Typically renewable and convertible to permanent protection
Term Life of mortgage or policyholder turning age 70, whichever is sooner Chosen by policyholder
Riders None Usually comes with a variety of optional riders

How does Manulife Mortgage Protection Plan compare with disability insurance?

Manulife Mortgage Protection Plan Disability Insurance
Max Benefit Lower of $10K per month or monthly amortized debt payment Max coverage based on income and occupation (up to $25K/month)
Waiting period 60 days Chosen by applicant (0/30/90/120/180 days)
Benefit period 24 months Chosen by applicant (2 yrs/5 yrs/to-age-65, etc)
Coverage Term As long as mortgage debt exists or when policyholder turns 65, whichever is sooner Chosen by applicant

How do I apply for mortgage protection insurance?

You can schedule a call with our licensed advisors to find the best mortgage life insurance policy for your needs. Click below here to look up quotes or schedule a call with an advisor today.

Need help?
Call us at 1-888-601-9980 or book time with our licensed experts.
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The information above is a brief representative summary for indicative purposes only. It does not include all terms, conditions, limitations, exclusions, termination and other provisions of the policies described, some of which may be material to the policy selection. Please refer to the actual policy documents for complete details. In case of any discrepancy, the language in the actual policy documents will prevail. A.M. Best financial strength ratings displayed above are not a warranty of a company’s financial strength and ability to meet its obligations to policyholders.

By Diarmuid Shiels
Insurance Advisor, LLQP
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