An Introduction To Mortgage Protection Insurance

An Introduction To Mortgage Protection Insurance



An Introduction to​ Mortgage Protection Insurance
Purchasing a​ home is​ a​ major expense that requires a​ significant and long term financial commitment .​
When you​ initially apply for a​ mortgage,​ you​ are approved for loan funding based on​ your financial status at​ the​ time of​ application .​
Most people do not expect that their financial situations will get worse over time,​ but in​ some cases that is​ exactly what happens .​
Whether through the​ loss of​ employment or​ the​ death of​ a​ family member,​ it​ is​ an​ unfortunate fact that many people find themselves in​ situations that keep them from being able to​ keep up with their home loan payments .​
Importance of​ Mortgage Protection Insurance
For many families,​ making mortgage payments would become difficult or​ even impossible in​ the​ event of​ the​ death of​ one or​ more members of​ the​ household .​
Before investing in​ a​ home,​ it​ is​ important to​ stop and think about how the​ house payments could be made if​ a​ major source of​ household income were to​ become permanently unavailable as​ the​ result of​ an​ unanticipated death .​
While no one wants to​ think that their family will ever face a​ worst case scenario,​ it's necessary to​ make contingency plans for every possible situation .​
Mortgages are such a​ large expense that it​ is​ important to​ consider how one's family would be able to​ avoid the​ threat of​ foreclosure,​ in​ addition to​ losing a​ loved one,​ if​ such a​ situation were to​ arise .​
Fortunately,​ it​ is​ possible to​ protect your family from having to​ face the​ possibility of​ such a​ situation by investing in​ mortgage protection insurance .​
Simply put,​ mortgage protection insurance is​ a​ life insurance policy that will pay off your mortgage following the​ death of​ one or​ more covered individuals .​
The primary purpose of​ this type of​ coverage is​ to​ reduce the​ financial burden placed on​ surviving family members following the​ death of​ a​ loved one .​
Homeowners who invest in​ this type of​ insurance coverage are making an​ important commitment to​ their families .​
This type of​ converge can ensure that one's family will never be forced out of​ its home as​ the​ result of​ income loss following the​ death of​ a​ family member .​
Who Needs Mortgage Protection Insurance?
In single income households,​ or​ families in​ which one partner earns the​ majority of​ the​ money,​ many people think that the​ only covered life needs to​ be that of​ the​ primary breadwinner .​
However,​ it​ is​ likely that the​ death of​ a​ non-working spouse,​ or​ one who works part time,​ can also have a​ serious impact on​ a​ family's ability to​ continue to​ afford to​ make mortgage loan payments .​
Many people make the​ mistake of​ focusing only on​ income loss following death .​
They neglect to​ think about the​ expenses that will increase if​ either adult household member is​ no longer around .​
For example,​ if​ the​ non-working spouse is​ staying home with young children,​ the​ family does not have to​ pay for full-time child care .​
However,​ if​ that parent were no longer there,​ the​ working parent would have to​ pay for child care,​ which is​ a​ significant expense,​ in​ order to​ continue working .​
Where to​ Get Mortgage Protection Insurance
There are a​ number of​ different options for making sure that your family remains financially able to​ stay in​ its home following the​ unexpected death of​ one or​ more members of​ the​ household .​
Many banks and other lenders offer mortgage protection insurance policies that can be purchased at​ the​ time you​ close on​ your home loan .​
These types of​ policies are specific to​ one's mortgage,​ and proceeds are disbursed to​ pay off the​ remaining loan balance upon the​ occurrence of​ a​ covered event .​
It is​ also possible that the​ company who carries your homeowners' coverage offers a​ mortgage protection policy .​
Payments for these types of​ polices can generally be included in​ the​ escrow payments for homeowners insurance and property taxes that are included in​ your monthly house payment.
Another mortgage protection insurance option,​ however,​ is​ to​ take out term life policies on​ the​ adult members of​ the​ household .​
These types of​ policies put more control in​ the​ hands of​ the​ surviving family members .​
Policy proceeds can be used to​ pay off the​ mortgage in​ a​ lump sum,​ as​ with a​ traditional mortgage protection insurance policy,​ or​ the​ individual can choose to​ continue making monthly payments while investing or​ otherwise utilizing the​ remaining funds .​
No matter which coverage option you​ select,​ the​ important thing is​ to​ make sure that your family is​ protected even under the​ worst possible circumstances .​
When you​ think about the​ alternative,​ the​ cost of​ mortgage protection insurance really seems to​ be quite small .​
When you​ purchase mortgage insurance protection,​ you​ are investing in​ peace of​ mind for yourself and for your family.




You Might Also Like:




No comments:

Powered by Blogger.