Home Mortgage Protection Insurance to help pay off your home
Home mortgage protection insurance is a type of life insurance the cost of which depends on many factors such as the amount of mortgage, the applicant’s age and their health status. There are several policies that also cover the mortgage for disabilities and their costs vary according to the occupation.
By purchasing the mortgage protection insurance you can rest in peace after death because you know your mortgage will be paid off by the insurance. The insurers send a check of the payment to the mortgage company leaving the family unencumbered.
The home mortgage protection insurance payments are also made directly in case of any disability or unemployment but only for a limited period of time such as one or two years. There is also a prescribed waiting before the payments are disbursed and these policies only cover the principal and interest payments on a mortgage for disabilities and unemployment. The homeowner association fees can be covered by riders.
Many people confuse the home mortgage protection insurance with the private mortgage insurance but they are both entirely different. The law requires a homeowner to get private mortgage insurance if they pay less than 20 percent of the home value as down payment. This has got nothing to do with unemployment, disability or death but it only pays back the bank in the event of a foreclosure.
Pros of Home Mortgage Protection Insurance
There are many major benefits of a getting insured in case of any mishap or loss and these policies are guaranteed to be accepted. When you are filling out the form for the insurance there will be some questions on it to decide whether or not you deserve the coverage. These question are of value for those who are high risk cases such as individuals with poor health or those working in industries with high rate of unemployment.
You have to decide whether or not you want to spend that money on home mortgage protection insurance when you are paying for the home.
Cons of Home Mortgage Protection Insurance
The insurance is a waste of money for those who already own the home or property. In addition to that the policy has a declining benefit and once you pay the premium for the entire lifetime of the mortgage, the payoff amount decreases. Therefore, it is not the best decision to buy a policy that wipes out the mortgage.