Mortgage Protection Insurance

When you are planning to get a mortgage loan, you may not be concentrating on getting mortgage protection insurance. There are many borrowers who think buying this product is useless. However, it may bail you out from financial distress if the need arises. You cannot guarantee that you will lead a healthy life throughout. If you are unable to make your mortgage payments for reasons beyond your control, mortgage protection insurance can take care of your monthly mortgage payments. Sometimes, other mortgage related payments are also covered in the insurance policy. So, if you have a full time job and you work for 16 hours or more, it is better you buy this product.

Shop around for the best deal It is not necessary that you have to buy the insurance policy from your existing lender. You can shop around and settle for the deal that you think is best for you. You can also try out various online insurance companies offering mortgage protection insurance. Don’t settle for the quotation you encounter first. Premiums vary from one company to another. So, do the benefits as well as the terms and conditions of the policy.

Means test is conducted and it is found out whether you have sufficient savings or not. If you have enough savings, you are expected to use your savings first. There are times when you have to wait for a period of 9 months or more to get the mortgage protection insurance payment. A good mortgage protection insurance policy will start paying you a month after you stop working. You may be out of work either due to layoff or illness.

How does it work? When you inform your provider that you have lost your job, payments begin a month later after verification. In majority of the cases, the insurance payment is made directly to the mortgage lender. However, sometimes customers may receive payments too.