Many questions exist about the different lines of mortgage protection insurance. Because of the growing number of home foreclosures and high unemployment, you are searching for more information about this type of insurance. Many wonder about the differences between the different types of mortgage protection insurance and which one is the best for them.
The real question many face is should you get unemployment mortgage insurance, disability or death mortgage insurance.
Unemployment Mortgage Insurance Explained
Unemployment mortgage insurance is for those who simply want protection in the event they lose their job. If you lose your job through no fault of your own, the mortgage unemployment insurance provider will pay you a cash benefit while you search for a new job.
The recent unemployment crisis in the U.S. has many people worried about the security of their job. You would not be crazy to be worried, nor would you be crazy to consider this type of mortgage protection insurance. While this type of insurance can be valuable to anyone who is the breadwinner for a family, it is suited more for the younger worker who needs the extra protection.
Disability Mortgage Insurance Explained
This type of insurance is designed to protect those who lose their job due to disability and are no longer able to pay their monthly mortgage. This can be a short-term disability or permanent disability. However, if you become permanently disabled, your disability insurance will only pay for a specified period of time. It depends on the policy how long that will be, though the more expensive policies will generally cover you for about three years worth of mortgage payments.
Disability mortgage insurance is very similar to other forms of mortgage insurance in that it covers your monthly mortgage payments due to a loss of employment. In fact, some unemployment mortgage policies will allow you to add disability coverage as a reason for unemployment and roll both into the same policy.
An accident or any other reason can result in your disability at any time, but as you age, the likelihood of becoming disabled increases. Because of this, disability insurance is generally more beneficial to older workers where the risk is higher.
Death Mortgage Insurance Explained
Death mortgage insurance is a little different from other forms of protection insurance. Death insurance will pay the entirety of your mortgage in the case of your death. It is designed to lessen the burden of your family and allow them to keep the home you have provided for them.
Similar to disability insurance, it can be beneficial to a worker of any age because of the chance of an accident or terminal illness. However, older workers are more likely to purchase this type of insurance because of the higher risk. You should consider that younger workers with families who have not yet built up their savings and investments are the prime beneficiaries of this type of protection in the case of an accident.
All three of these types of mortgage protection insurance can be beneficial to you if you want to add protection for your largest personal investment. You should examine your own situation to decide which type of coverage is best for you. Keep in mind though, unemployment insurance, disability mortgage insurance, and death mortgage insurance are not mutually exclusive and you can indeed seek complete protection with all three polices from some providers.