Mortgage Protection Insurance

Nowadays, it seems that there is a type of insurance for virtually anything that can go wrong, from health insurance to disability to life to car and so on. Mortgage protection insurance is geared to be a safety net in case something happens to you and you are unable to pay your monthly mortgage payment. Whether or not you need this type of insurance can depend on several factors — whether or not you’re the primary breadwinner of the family, how many children you have, what type of other safety nets you have and whether you have a very close family member who you know can take care of you in case of an accident or tragedy.

When Mortgage Protection Insurance Kicks In

Sudden illness and accidents aren’t necessarily the only reasons you could need mortgage protection insurance. You could also have coverage to protect you in case you lose your job. Unemployment — whether it’s because of a disability or just because of a tough economy — can keep you from paying your bills and dig you deep into a debt hole, even if you are great at budgeting. Unemployment through disability is even worse, and the amount you receive from disability insurance isn’t always enough to cover your bills. Also, mortgage protection insurance can pay at least a portion of your salary if you become unemployed for a short period of time. The amount of time the insurance lasts varies based on who the insurance provider is. Generally, it’s about 12-24 months.

Types of Mortgage Protection Insurance

Mortgage protection insurance can be similar to life insurance in that your family receives money if you die. Mortgage protection insurance pays for the monthly payments instead of cutting you a specific one-time check in the case of a life insurance policy. Sometimes you can purchase a mortgage protection insurance policy if for some reason you’re rejected from receiving life insurance. Mortgage protection insurance can also be similar to disability insurance in that your family receives money if you become disabled.

Finding the Best Mortgage Protection Insurance For You

The best type of mortgage protection insurance for your neighbor or best friend isn’t necessarily the best policy for you. Consider whether you need disability insurance, want to add a family member to the policy, know how long you’ll need to pay your salary in case you lose the coverage, your exact monthly mortgage, and how your career is going. The type of career you’re in can also affect how much coverage you’re in. If you’re in manufacturing, you’re in a shrinking career, whereas if you’re in technology, your career base is increasing. Sit down with your agent and discuss your specific situation if you feel unsure about the amount of coverage. If you have a solid disability insurance policy, then you may not need mortgage protection insurance.