Mortgage Protection Insurance is an insurance policy which is designed to pay off your mortgage if you die during the term or fail to pay your payment due to any unfortunate event. On the happening of event the insurance company will pay the amount directly to your mortgage lender. It is the best way to secure your family in your absence. It gives you the peace of mind that your family or dependents will be able to afford to stay in your home, even if you are no longer there.
In a recent survey by the Association of British Insurers (ABI), life insurance was found to be the most popular form of personal protection insurance and mortgage protection insurance. From the sample of working respondents over the previous six quarters an average of 47 percent held life and mortgage insurance policies. You can’t choose a best policy for you even if you don’t have enough knowledge about its types. Most important types of MPI are given as fallow:
Mortgage Life Insurance: It is specially designed to protect a repayment mortgage. This insurance ensures that even when you die your mortgage will be paid back fully to your lender. You can purchase this insurance from the lender. The insurance premium will be added to the mortgage payments. A borrower can only purchase it if he is aged between 16 and 64 years and avail the benefits till the age of 80. The two main types of mortgage life insurance available are level term insurance (used to protect an interest only loan) and decreasing term insurance (used for the protection of a repayment loan).
Mortgage Disability Rider: The mortgage life insurance is often provided with a disability income rider which ensures that your mortgage payments are made in case you become ill, injured or unable to perform your usual job. It is accessible to people aged between 18 and 64 years. This rider provides you with monthly income after about 60 days of disability and you receive the payments all through a year for each period of continuous disability.
Mortgage Loss of Employment Rider: This payment is added to your mortgage life insurance in case you become reluctantly unemployed. You can avail the benefits after 60 days of being unemployed/job-loss and continue to get the payments for 9 months after each claim. Borrowers between the age of 18 and 64 years can access this insurance.
Mortgage Critical illness Insurance: This critical illness rider is added to your mortgage life insurance when you suffer from some serious illness. It helps to pay off your mortgage, debts, or pay for alterations to your home, while you are not able to do work. You can purchase this insurance only when you are aged between 18 and 55 years and enjoy the benefits till the age of 70. It could be good choice for you if you don’t have a good employee benefits package to cover a period of time off work due to sickness or if you don’t have savings to tide you over if you were seriously ill.
Mortgage protection insurance having a key importance in our life because life is totally unexpected and no one knows what is going to be happening in next moment. So, through this you can protect your mortgage home and your family’s future even you die, ill, unemployed or disabled. It provides you peace of mind even you are working in very critical situations.