If you have purchased or refinanced a home, you have probably found some offers for mortgage protection insurance in your mailbox. The product promises to pay off your mortgage if you die, become disabled, or ill. It probably also mentions protection in case of unemployment. This product generates a lot of interest, but is it what you think it is?
Unemployment Mortgage Protection is one product, which either provides you when cash when laid off or is designed to make payments to your lender. Of course, we like the sort that pays the consumer cash, because the other sort just seems designed to protect the lender, and not the home owner!
But most mortgage protection insurance is simply a form of term life insurance with a face amount that covers a mortgage balance. Sometimes a decreasing term life insurance policy is used because it will decline as the mortgage declines, and so the premium is cheaper. Riders, such as a disability or critical illness rider, are attached to these policies to cover the insurance policy owner in case of these events, as well as death.
Of course, we also have people who think that mortgage protection is homeowners insurance. This is not true. Homeowners insurance covers property, where mortgage insurance covers the homeowner! Look here for the best homeowners insurance quotes.
mortgage protection, mortgage insurance, unemployment
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