“Desjardins: Protecting Your Mortgage Benefits You and the Planet”

What is Loan Insurance?

While the best-known types of insurance are used to cover your income in the event of disability and to leave an amount of money for your loved ones in the event of death, Desjardins Loan Insurance¹ rather aims to protect your mortgage financing. This is complementary protection to other individual insurance products. You can join when you apply for a mortgage loan with your Desjardins advisor. Its premium takes the form of an additional interest rate applied to the loan.

Tailor-made coverage*

You choose the desired percentage of insurance for life and disability protection, between 10% and 100% (the percentage of disability protection must be equal to or less than that of life protection). Thus, even a person who already has partial disability insurance with their employer could supplement it with additional protection.

• In the event of death, the balance of the loan is reimbursed according to the percentage chosen.
• If an accident or a physical or mental health problem renders you disabled²your mortgage payments are taken care of³ (in whole or in part, depending on the percentage of coverage), for the entire period of disability⁴. These insurance payments are tax-free and are paid directly to the Caisse to reduce your financing balance.

A premium that decreases over time

The insurance premium is established, among other things, according to the sex, age and smoker or non-smoker status of each borrower, the coverage chosen, the amount of the loan and its duration. By subscribing to Desjardins Loan Insurance, homeowners benefit from advantageous pricing throughout the term of their mortgage loan.

Since the premium takes the form of an additional interest rate on the loan, it remains proportional to the balance. As the mortgage is paid off, the premium also decreases⁵.

Calculation examples

A 31-year-old couple, non-smokers, buys a house for $400,000 with a down payment of $80,000. The mortgage is amortized over 25 years, the mortgage rate is 5.69%, and its payment frequency is bi-weekly.

By taking out Desjardins Loan Insurance (100% life, 50% disability):

• The insurance premium takes the form of an additional interest rate of 0.431%.
• The insurance costs $51.47 on the first loan payment to be insured for death and disability.
• Five years later, on the last payment before mortgage renewal, the cost of insurance will be $49.88.

Talk to your advisor

To properly protect yourself and your loved ones regarding your financial obligations related to your mortgage financing in the event of death or disability, make an appointment with an advisor. This person will be able to provide you with additional information on Loan Insurance and accompany you when you enrol.

*Certain conditions and restrictions apply

¹ _{DESJARDINS ASSURANCES refers to Desjardins Financial Security Life Assurance Company. DESJARDINS, DESJARDINS ASSURANCES and associated trademarks are trademarks of the Fédération des caisses Desjardins du Québec used under licence.}

² _{For you to be entitled to insurance payments, your disability must be total, that is: your disability must result from an illness or an accident and require continuous medical attention; the illness or injury from which you suffer or your state of health must be confirmed by a doctor; and your disability must meet the following conditions, depending on your situation: if you have worked at least 20 hours of paid work per week in the 4 weeks before becoming disabled. Your disability must prevent you: during the first 24 months: from performing each of the main tasks of the regular job you held on the date your disability began; after the first 24 months: to take up any paid employment. If you did not work at least 20 hours of paid work per week within 4 weeks before becoming disabled. Your disability must prevent you from carrying out all of the normal activities of a person of the same age as you.}

³ _{You must be disabled for a certain number of continuous days before you are entitled to insurance payments. This number of days, called the “waiting period”, can be 0 days (therefore no waiting period), 30 days or 90 days, depending on your situation.}

⁴ _{For life insurance: you are covered until the 1st renewal of your loan which occurs from your 70th birthday, but without exceeding the date of your 80th birthday. For disability insurance: you are covered until the 1st renewal of your loan which occurs from your 65th birthday, but without exceeding the date of your 70th birthday.}

⁵ _{The additional interest rate required for the insurance is revised, among other things, in the following situations: each time your loan is renewed; we take into account, in particular, the age you have then reached; if you have a “5 in 1” loan: each time the caisse changes the interest rate on your loan during the annual review; when there are any changes to the terms of your loan or your insurance. The cost of insurance could then increase.}