Importance of Mortgage Protection Insurance

Buying your own home is a huge financial responsibility for up to thirty or forty years depending whether you’ve paid cash or taken out a mortgage. Most people can not afford to buy a home outright, so they are forced to take out mortgages in order to buy their own home in the form of free standing homes, apartments or condos. Committing to a thirty or forty year loan may appear frightening but mortgage protection insurance can make the commitment a little less scary.

Mortgage protection insurance is taken out in order to protect the home-owner in case they are unable to make mortgage repayments in the future due to bad health, job loss or death. With mortgage protection insurance you’re not leaving your family with the burden and responsibility of paying back a huge sum of money to the bank or mortgage company because you are unable to make repayments for one reason or another. While mortgage protection insurance is not always compulsory it is definitely a type of insurance every mortgage holder should consider. Of course if you resign from your job mortgage insurance will not cover your repayments. You will have to prove that you are unable to find work.

Different policies will cover different claims and payments on your mortgage. If you find a good mortgage protection insurance policy, any bills or payments related to your mortgage like interest and repayments are going to be covered. The policy should pay out within a month of not being unable to make repayments so that you will not be at risk of foreclosure. Most insurance companies, will make payments for up to twelve or twenty four months depending on what you have signed and covered yourself for. During this time it is likely that you will be able to find employment or recover from any illness that you may have suffered from. Unfortunately accidents and illnesses happen that prevent you from working, today lay off’s are more common than ever and job security is an illusion.

Your mortgage protection insurance premium depends on the size of your mortgage. So an extra few dollars each week could save you your house if you are unable to make mortgage repayments. The smaller your mortgage the less you’re going to pay for mortgage protection insurance. It really is worth the cost for a bit of peace of mind if something does go wrong.