The Greek philosopher Heraclitus said, “change is the only constant in life”. Many of us experience significant shifts each year. In most cases we work toward achieving life’s milestones, and occasionally we get a few surprises thrown in too. Whether you’ve expanded your family, altered living arrangements, have a new employment opportunity, or are recovering from pandemic impacts, now may be the right time to consider payment protection insurance.
What is payment protection insurance?
Payment protection insurance is also known as credit insurance or creditor’s insurance. It helps to achieve financial security and increased peace of mind for you and your dependents. Knowing you are protected makes difficult times slightly easier.
What does payment protection insurance cover?
Payment protection insurance covers all kinds of debt. In the event of a death or critical illness, this coverage can pay out a mortgage, loan balance, or line of credit, or make payments on a borrower’s behalf in the event of a disability or job loss. Of course, it goes without saying pay-outs are only up to a pre-specified maximum. Even so, it is a benefit to any borrower.
Here are two examples of how payment protection on your loans or mortgages can alleviate financial stress:
Scenario 1: John, single dad, loses his job
John is a chef at a very popular local restaurant. Business has picked up a bit since the Pandemic, but it isn’t what it used to be. The owners have scheduled a meeting with the entire staff team, and John is worried the news may be devastating. At the meeting, it is confirmed that the restaurant will close in two weeks. John has two kids to take care of and is suddenly unemployed.
A flurry of thoughts enter John’s mind. How will I feed my kids? How will I pay my bills? Will I be able to find another job before my mortgage payment is due? John looks for new job opportunities, but prospects are limited. He then phones his Innovation Federal Credit Union advisor to talk through the financial impacts of losing his job.
His advisor confirms that John has opted in for Loss of Employment insurance on his mortgage. This type of payment protection will pay John’s monthly mortgage payments up to $3,000 per month for a maximum of nine months. John is so relieved! He is confident he will find another job soon and his family will not be affected. Thank goodness he opted in for payment protection insurance.
Scenario 2: April, mom of three, is diagnosed with cancer
April receives a call from her family physician’s office. Her test results are back, and the news isn’t great. She has an aggressive form of a life-threatening cancer. April is shocked to learn that one in two Canadians will develop cancer in their lifetime1. After speaking with her support network, April contacts her Innovation Federal Credit Union advisor to see if she has any coverage that can help.
Her advisor confirms that April has critical illness insurance on the family’s mortgage as well as on her line of credit. She is relieved to learn that her critical life insurance will pay the outstanding insured amount tax-free2. Her advisor begins the paperwork to have her debts paid on her behalf. April’s family and home are protected, and she can focus on what matters most.
What are the advantages of payment protection insurance?
The above scenarios bring to light the many advantages of payment protection insurance including:
- Your credit rating and credit score stays intact
- Your lifestyle remains unaffected
- Your assets remain safe
- You can enjoy peace of mind as a borrower; and,
- In the event of an unexpected death, your loved ones remain protected from the burden of your outstanding debts
Overall, payment protection allows you to avoid financial stress when you experience significant life events. It’s the reason why we offer payment protection options on all loan types and to every one of our eligible members. Life changes quickly, and we want to ensure you are adequately protected.
If you’d like to discover more about your payment protection options, our advisors are here to help! We can review your current coverage, discuss additional coverage options, and provide a no obligation quote for your consideration. It’s never too late to add payment protection.
Call, chat or contact us today to ensure you’re protected.
1 .Statistics Canada.
2 Creditor’s group insurance is optional and is underwritten by Co-operators Life Insurance Company. Supporting services, such as enrolment intake, medical underwriting and claims administration, are provided by the employees of CUMIS Services Incorporated, a subsidiary of Co-operators Life Insurance Company. Coverage is governed by the terms and conditions of the creditor group insurance policy issued to the creditor and is subject to terms, conditions, exclusions and eligibility requirements. See the Product Guide and Certificate of Insurance for full coverage details. To contact CUMIS, please visit www.cumis.com or call 1-800-263-9120