For many people, a house will be the most expensive thing they ever buy. In the same vein, because of the high cost, many also go heavily into debt to buy one. Although mortgages can help people finance the home of their dreams, they also carry significant financial risks if the mortgage payer suddenly develops a critical illness, such as cancer. This could mean the person has to stop working, seek expensive treatment, and eventually no longer have enough money coming in to make mortgage payments. Thereafter, default and foreclosure would likely be on the horizon. To protect against this risk, mortgage critical illness insurance aims to alleviate such problems.

What Is Mortgage Critical Illness Insurance?

Mortgage critical illness insurance is insurance designed to offer financial protection against mortgage defaults due to critical illnesses. You can purchase it separately or in combination with other types of mortgage insurance, such as mortgage life insurance, which pays out a benefit to help pay off the mortgage upon the policyholder's death. (Read Top Reasons to Forgo Mortgage Protection Life Insurance as a counterpoint to better evaluate your needs.)

Illnesses that can qualify as critical illnesses include heart attack, stroke, cancer, and other similarly serious health issues. Any of these may require extensive and thereby expensive treatments, sometimes hospitalization, and very long recovery times. This can be very problematic if the primary breadwinner in a family develops a critical illness. In such situations, expenses can quickly pile up as income quickly diminishes.

Good Candidates for Mortgage Critical Illness Insurance?

Many people can benefit from buying mortgage critical illness insurance, and certain types of people who may need it more than others.

1. People who put little money down and owe a substantial amount.

The less you owe on a mortgage, the less of a financial risk you face if you were to develop a critical illness. In this case, you may have enough in savings to sustain yourself while recovering or be able to borrow adequate sums from family or friends in your time of hardship. However, if you owe a substantial amount, you would likely burn through any savings you have, and your loved ones may not be able to offer enough financial support for the time being.

2. People who have a significant family history of critical illnesses.

For example, a man who comes from a family with a history of the men getting heart attacks in their late fifties may be someone with more of a likelihood of benefiting from mortgage critical illness insurance. After all, it can take months to years to recover from strokes, heart attacks and cancer. That is a long time to go without being able to generate funds for mortgage payments.

3. People who don't have a lot of savings.

In times of critical illness, you can dip into savings to pay mortgage bills and other expenses. However, people who have little savings obviously cannot sustain themselves for very long. Therefore, a lack of significant savings can definitely be a good reason to consider mortgage critical illness insurance.

4. People who don't have other solid insurance options.

Other forms of insurance can help you out financially if you suddenly fall ill. For example, a solid disability insurance policy would act as a form of income replacement. What's more, most people can get disability insurance through the government. However, private policies can help cover even more costs.


Even for people with high-paying jobs, critical illnesses can cause serious financial problems. This is especially true for families with only one earner and who have a lot of money left on their mortgage. Going through a critical illness, such as a heart attack, is bad enough on its own. But if you add defaulting on a mortgage and potentially facing foreclosure to that situation, it can be much, much worse.

Mortgage critical illness insurance is an insurance option that may be a sound investment for many people, especially those at high risk for developing a critical illness. Therefore, it may be worth the time and money for mortgage holders to look into this type of insurance to best prepare for the future.