Mortgage Protection Policy
The world unstable economy situation has given rise to many issues. One of such problems is the risk of losing the home one has. Natural disasters and unemployment are other factors that have put man in dilemma as what if he loses what he owns. Here comes into action the mortgage protection insurance and plays its role.
What it is?
Mortgage protection policy is an insurance policy in which a person pays a non-changing premium during his life time and is reimbursed if he dies. The policy remains in effect even after a person dies and the insurance pays off his mortgage. In case of job loss, mortgage protection plan gives money every month for a specific time period, normally for 12 months or until the insured persons circumstances become better.
To ensure return of a person to work, no policy provides the income lost fully. A specific amount or percentage of gross salary is set and paid.
Scope of Mortgage Protection Insurance
Mortgage protection insurance is coves a wide area of subjects. Different firms provide different policies. Payment in the event of loss of property because of natural disaster, payment for disability resulted from an accident or natural disaster, mortgage payment in case of unemployment, sickness or injury are a few areas that come under the umbrella of mortgage protection policy. The most common policy however is balance pay off in the event of death of a person.
It was not that important ever as it is now. Job insecurity is the biggest problem of ever other person. Losing your job means losing your home. The homeowners there for need to prevent their home form auction and opt for various policies. Joint mortgage protection insurance is also available covering both the husband and wife and pays off when either of the two dies.
Rationale of mortgage insurance policy
- Home is one of the largest and most important investments of people. People plan to have comfort in their own and their children’s life. For this they buy large house having many rooms and a wide yard for the children to play. People plan to have peaceful life in their spacious home after retirement but this dream shatter as soon as the owner die and his loved ones are not in a position to live in the house and enjoy the comfort. The mortgage payment and other expenses are huge burden for the deceased family specially if they are young or the spouse is old having no permanent source of income. In such an awful situation the mortgage protection policy becomes a ray of hope for the aggrieved family.
- The government’s engagement with other issues and less attention and check on the financial organizations provided them the opportunity to issue illegal huge loans and they got involved in gluttonous means of earning at the expense of common man’s sufferings. People had to bear the pain of liquidation, bankruptcy or sale of their homes and other property at auction because they got trapped in the banks and financial institutions snare. This situation further highlights the significance of mortgage protection policy. Had these people such policies, they would not have lost their valued properties and homes.
- Another justification for mortgage protection policy is, it keeps ones home and property protected in the event of job loss or death of the family head or any other responsible for mortgage payment. In unpredicted adversities, loss of home makes the burden hundred times more but if there is a mortgage protection plan, it helps the family carry on and tolerate the hard times with some ease.
- The main benefit of the mortgage protection is the family does not have to be bothered about loss of their house in a fateful situation like job loss, death, natural disaster or any disability. It is in fact a relief in misery.
- It gives mental satisfaction and keeps the family away from the tension enjoying their life s they know they are protected even if a terrible situation comes.
- It is not that costly as usually thought. The family’s financial situation is the basis for any such policy. Any family can afford it.
- It can also be tailored to the worth of the home or family’s monetary state of affair.
- It is good news for retired people who are forced to start work to keep their homes and earn their living make their ends meet. They can enjoy peaceful living and their retirement period having the benefits of the mortgage insurance they have
- No large interest and debt is charged in the event of late mortgage because of any personal problem.
- Mortgage protection is useful not only for the person who buys it but also for the nation as a whole because it works as an insurance policy for the economy.
How to get a mortgage protection Policy
Reliable information about mortgage protection policy can be obtained online. They provide the insurance providing companies list, their policies, terms and conditions and the benefits the policy holder can get.
The legal process for claim, clients experience and guidelines can also help one decide which is the best and most suitable strategy is for you.
The primary idea is the same in all policies though variations exist in all Mortgage protection policies. Having information about all alternatives is therefore necessary before taking any decision.
When to purchase?
Many people do not give a thought to the idea of Mortgage Protection Insurance and hence do not think about how to cope with the events like an accident, illness or joblessness. When such events actually occur, they become frustrated about their house loss. As a house owner, you should not make such mistake and do buy an insurance policy.
One can buy mortgage insurance at the time he purchases a house or later in future. Like all insurance policies, the age of the person, smoking habit etc are considered and the price is set accordingly when an application is given for mortgage protection policy.