Definition
Mortgage job loss insurance (or mortgage unemployment insurance) covers mortgage payments if the borrower involuntarily loses their job (layoff, company closure). It generally does NOT cover: - Voluntary resignation - Foreseeable contract end - Early retirement - Termination for cause - Self-employed workers (except exceptions)
Typical characteristics: - Waiting period: 30-90 days after job loss before benefits begin - Benefit duration: 12-24 months depending on product - Initial exclusion period: often 3-6 months after subscription without coverage
Alternative: government employment insurance (EI) already offers basic protection. Job loss insurance complements EI (EI covers up to 55% of salary, insurance fills the gap for mortgage payment).
Evaluation: premiums are relatively high compared to benefits. Compare with building an emergency fund of 3-6 months of mortgage payments.