Mortgage Protection Insurance: What Is It?
California mortgage protection insurance will pay off the value of your home in the event of death or disability. As with life insurance, the policyholder pays set premiums for a set period of time. Riders may be obtained for loss of job – in the event the policyholder becomes unemployed their mortgage will be paid by the insurer. This rider is usually costly and for a set period of time…6 months to a few years depending on the policy.
Need – How to Protect Yourself From Losing Your Home
Mortgage protection insurance provides peace of mind in the event of an accident that causes the death or disability of the policyholder. Many types of mortgage protection insurance will pay out the full amount of the original mortgage in the event of a death, and some pay off the current balance of the loan. When a disabling injury occurs, mortgage protection insurance enables policyholders to continue making their monthly mortgage payments.
Depending on the company, you may not need to undergo a medical exam to obtain coverage. You can opt to have the benefit amount dispersed as a lump sum, over several years, or monthly mortgage payments that come due. Some mortgage protection policies offer such additional features as payback of premiums; suspension of premium payments in the case of unemployment; and the option of turning the mortgage policy into a life insurance policy.
The premiums on mortgage protection insurance depend on the size of the mortgage, the age of the insured, and whether the insured smokes. Policies generally must be taken out within 2 years of purchasing the home, although some companies will issue a policy after as long as 5 years. Term life insurance policies are a good alternative and can be purchased for much higher death benefits and have no restriction on the number of years from the purchase of the home.