This guest blog has been created by Ontario disability lawyer Mark Yazdani. For further information about disability law, visit www.disabledlaw.ca.

Mortgage insurance is designed to protect homeowners in the event that they suffer a disability and become unable to work.  The policy provides for payment of a non-taxable monthly benefit (usually an amount equal to your monthly mortgage payment) for a fixed period of time. Most mortgage insurance policies also include a life insurance element as well that pays off the outstanding mortgage in the event of death. Other policies may include a critical illness component.

For most insurance companies, there is minimal initial underwriting of these policies. There are usually only 1 to 3 health questions which must be answered regarding any known health problems or missed time off work.  If an applicant does have current health problems, he or she may be required to undergo a health examination before qualifying for the policy. Some lower value policies are automatically granted without the applicant needing to answer any health questions. 

To qualify for disability benefits, a claimant must meet the definition of disability in the policy. While the language in different policies varies, the fundamental element of the definition is an ability to perform regular job duties as a result of an injury or a sickness.

The most common reason for a mortgage insurance claim to be denied is misrepresentation in the application. The insurance company will deny a claim if they believe that an applicant was not truthful when answering health questions. 

It is recommended that you consult with a disability law office in the event that your mortgage insurance claim is denied. There are strict time limits to start legal proceedings against an insurance company.