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Mortgage protection insurance
A Guide to Mortgage Protection Insurance

If you take out a mortgage to buy your home, you should also seriously consider taking out mortgage payment protection insurance (MPPI) or mortgage disability insurance.

Many borrowers do not think of purchasing mortgage payment protection insurance because they are unsure about its reliability. However, the government has enforced certain policies to ensure that all mortgage insurance providers meet certain minimum standards to truly protect their customers in the event that they cannot pay their mortgage.

Some borrowers foolishly believe that they will be able to depend on their savings to cover their mortgage repayments in the event that they become unemployed or fall ill.

Unfortunately, it has been shown that it is extremely unwise to rely solely on these options. Your savings and/or benefits may cover part of the mortgage or even all of it, but this will only last for a while. It is highly unlikely that your mortgage repayments will be taken care of for an extended period of time.

As a result, it is best to properly protect yourself and your family by considering purchasing mortgage payment protection insurance or mortgage disability insurance.

 Important information about mortgage payment protection insurance

  • Purchasing mortgage payment protection insurance is not obligatory but some lenders may require you to buy it before they approve your home loan.

  • Most borrowers buy mortgage insurance from their mortgage lender for the sake of convenience. However, be aware that you can buy your mortgage insurance as a stand-alone product from any insurance provider.

  • As a standard rule, a good mortgage insurance policy will start to pay 1 month after you become unemployed and have received no salary.

  • A good mortgage payment protection insurance policy normally pays out for a maximum period of 12 months.

  • When deciding which mortgage insurance to buy, choose one which will cover all bills related to your mortgage including interest and repayments.

  • In most cases, mortgage payment protection insurance payments are made directly to your mortgage lender.

  • If you have over-committed yourself to a larger mortgage than you can comfortably afford, it is more crucial for you to consider buying mortgage insurance.

  • Watch out for lenders who insist that you should purchase their mortgage payment protection insurance. If this happens, shop around and do not feel pressured to buy from them.

  • Always read the fine print and understand all the terms and conditions before you purchase your mortgage insurance.

Some information about mortgage disability Insurance

  • A mortgage disability insurance policy covers your mortgage repayments in the event that you become disabled.

  • Mortgage disability insurance is actually a specialized form of decreasing term insurance. This means that as your loan balance decreases, the amount of insurance decreases at the same time.

  • Buying mortgage disability insurance may be sensible if it is necessary for your family to continue living in your home after you die or become disabled, but would be unable to contribute to any mortgage repayments.

In addition to considering whether some kind of mortgage insurance, like mortgage payment protection insurance or mortgage disability insurance might be right for you, It might also be a good idea to consider buying critical illness insurance if you or your spouse is not in strong health.

Check out the best mortgage providers

 
 
 
 
 
 
 
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