Mortgage Payment Protection Insurance – What You Need to Know
Illness and death are the natural progression of life. Everyone experiences both at some point, and for some it can be a time of financial trials and for others, those that were prepared, those times can be free of financial worries. Those with mortgage payment protection Insurance will find themselves in the latter category. There are 3 main types of mortgage payment protection: protection in the event of a disability, protection in the event of a death, and protection in the event of unemployment.
Mortgage Life Insurance Protection – What Does It Do
Mortgage life Insurance payment protection Insurance is an insurance that pays off the mortgage of a home when the mortgage holder dies. Unlike PMI insurance, which is required for all homeowners who carry a mortgage, mortgage payment protection is an optional policy. In addition, if the mortgage holder becomes ill, disabled, or even loses their job, mortgage payment protection insurance continues to pay the mortgage until the mortgage holder is back on their feet. (This applies only for the amount of time stipulated within the policy and can vary based on the plan purchased and is not offered by every insurance company).
Who Should Get Coverage?
Anyone who owns his or her own home and holds a mortgage is eligible. However, it is not recommended for everyone, and in fact cannot be purchased by everyone. This type of insurance must be purchased before the purchased home leaves escrow. This is to protect insurance companies from fraudulent claims. In addition, mortgage insurance is not necessary for those who have no family members or for those who can financially afford the mortgage payment if the mortgage holder should become ill or die.
Individuals who should consider this type of insurance are those who do not want the mortgage payment to be a burden to family members should something happen, do not have the financial ability to cover a mortgage payment in the event of injury, illness, or death, and do not have enough life insurance to cover the costs of the home.
The Pros and Cons
As with any insurance, there are pros and cons for a policy purchase, the idea is to know exactly what you are buying, what it costs, and what it covers. Make sure you ask all of your questions so there will be no surprises when it comes time to make a claim on the policy.
There are many good reasons to purchase mortgage payment protection.
- No financial burden on the family should the worst occur
- Should an injury occur, mortgage payments will continue to be paid
- Some insurance companies offer a full refund once the mortgage is paid off, if the insurance is not used
- If you are in poor Health it is easier to purchase mortgage payment insurance than additional life insurance, and provides better coverage for your family
- No physical is required
There are a few downsides as well.
- It can be more expensive than any other kinds of insurance
- Not all insurance companies offer reimbursement if the insurance is never used
- The elderly pay three times more than a young Healthy person will (this is true of the life insurance and disability insurance options and not necessarily the unemployment insurance option).
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