Insurance
A client's bank required him to insure the house against fire, flood and theft before releasing the mortgage. Nobody asked what happens to the payments if he isn't around to make them. He hadn't thought about it either.
An illustrative example, built from what I see across households in Trinidad. Marcus is a house officer at a public hospital earning $28,000 a month between base pay and on-call allowances. Keisha teaches at a primary school and earns $12,000 a month. Two years ago they bought a $1.8 million, four-bedroom house in Trincity. The mortgage payment runs $11,377 a month. They also carry a car payment of $3,400 a month on a 2025 Hyundai Tucson, plus an older vehicle that's paid off. Their daughter is in primary school.
The household income is $40,000 a month. If Marcus dies, that drops to Keisha's $12,000. The mortgage alone is $11,377. That leaves $623, not even enough to cover the car payment, groceries, or a single light bill.
Here's the question that changes everything: on Keisha's $12,000 salary alone, what's actually left once the bank is paid?
The honest answer is $623. Not enough for the car payment, groceries, uniforms or a single light bill, and that's before anyone accounts for the fact that Keisha isn't a co-borrower on the mortgage.
The loan doesn't quietly pass to her because she's the widow. She has to apply to have it transferred into her own name, the same credit check, the same income review, the same paperwork as any stranger walking into the bank for the first time. Any bank running that review applies a debt-service ratio test, and a mortgage payment of $11,377 against a $12,000 salary consumes nearly all of it. The numbers above already answered whether she'd qualify.
If she doesn't qualify, and can't bring the payments current, the bank exercises its power of sale. In Trinidad, that's usually handled by private treaty, a negotiated sale arranged through the bank's own agents rather than a courtroom auction, with the property sold as-is. Whatever it brings in pays off what's owed first. The family loses the house, and it happens on the bank's timeline, not theirs. Banks in Trinidad don't forgive a mortgage because the co-signer died. The loan is exactly as large on the day after the funeral as it was the day before.
Most people assume the mortgage simply becomes the surviving spouse's to keep. It doesn't, not automatically, if her name was never on the loan. She inherits the right to apply, not the loan itself. You'll spend an afternoon comparing homeowners insurance quotes so the walls are covered if a pipe bursts or a fire starts. You won't spend ten minutes checking what happens to the mortgage if you don't wake up tomorrow. The bank required proof the house won't burn down. Nobody required proof that the person paying for it will still be alive next year.
First, life insurance sized to the outstanding mortgage balance, not a flat number picked because it sounds reasonable. If the loan is $1.8 million, the coverage should clear $1.8 million, not $200,000. Done properly, the payout clears the loan outright. There's no reapplying, no credit check, no bank deciding whether the surviving spouse qualifies to keep her own home.
Second, a policy that fits how a mortgage behaves over time. The balance owed today is the highest it will ever be and it drops every year. A mortgage life policy typically pays out what's outstanding at the time, not a fixed sum picked on day one, so coverage that isn't reviewed against the loan schedule can quietly fall behind the balance it's meant to protect.
Third, coverage that's separate from whatever life insurance comes through an employer. Group coverage through a job usually ends the day the job does, and it's rarely enough to clear a seven-figure mortgage on its own.
This isn't only a death scenario either. Critical illness carries a version of the same risk: miss enough mortgage payments after a diagnosis, and most banks apply penalty interest once arrears pass three to six months, depending on the institution, well before any other option is on the table.
The same proportions repeat at every price point. A smaller loan usually sits on a smaller household income, so a $500,000 mortgage on a combined salary of $15,000 a month carries the same kind of exposure as Marcus and Keisha's, one income disappearing and the other left to cover a payment it was never built to carry alone. Whether your mortgage is $400,000 or $4 million, the question is the same: does what's left standing still cover what's owed?
Fixing this doesn't require Marcus and Keisha to change their mortgage or their bank. It takes twenty minutes to see whether the coverage they already have matches the loan they're carrying.
Marcus and Keisha are an illustrative example, not real clients, used to show how the numbers play out.
If you have a mortgage in Trinidad and haven't checked whether your coverage matches your loan balance, book a free consultation at daronjacobsfinancial.com. The meeting takes twenty minutes, there's no obligation, and you'll leave knowing the exact number. For most households, closing a gap like this costs less each month than a single car payment.
Daron Jacobs, RFC, FSCP
Senior Financial Advisor
Daron Jacobs Financial Limited
Sagicor Life Insurance Trinidad and Tobago
1-868-759-8359
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