Don't be quick to sign off on Mortgage Payment Protection Insurance from your lender
Why is it important to review the details the Mortgage Payment Protection Insurance?
When you don't review things before you sign off on them things like Donald Trump’s Inauguration photo's inspirational quote glaring typo happens. It's the same thing if you take the Mortgage Payment Protection Insurance offered by your lender - It's not the same as having your own disability policy and doesn't offer the same benefits.
However, mortgage insurance is an extremely important insurance to have – in fact, it can the difference between keeping a roof over your families head or ending up having your home repossessed.
What if I already have Mortgage Payment Protection Insurance?
If you recently took out a mortgage, you may remember the lender asking you whether you wanted mortgage protection insurance. It probably sounded expensive and unnecessary. And while, in some cases, there are companies who like to charge you too much for the product, it doesn’t have to be that way.
As for it being unnecessary – get the right policy and at the right price and it will be an invaluable safety net for you. So, what is mortgage insurance? It is a product whereby should you be unable to meet your mortgage repayments due to being disabled or due to being unable to work because of sickness or maybe an accident – then it will cover your mortgage repayments.
Your mortgage repayments (and sometimes other mortgage related costs too) will be covered for up to a set period of time (typically 24 months but this can vary from provider to provider) to give you enough time to find another job, or get well etc.
Many people may think that mortgage payment protection insurance is a waste of money, using the old adage “It’ll never happen to me”. However, this is not true. Being unable to work – and therefore having to struggle on EI benefits – due to disability, accident or sickness can happen to anyone. It does not discriminate and can strike anyone at any time.
Therefore, if you are self-employed or a full time employee and you have a mortgage, then taking out disability insurance against the financial ramifications makes sound sense.
Despite what the press says, it doesn’t have to be expensive to take out this kind of insurance, and you do not have to take out a policy with your mortgage lender. This means you are free to shop around to get a policy that offers you comprehensive protection without a high price tag!
If you are looking for mortgage payment protection insurance, then do not automatically accept the first quotation you get – premiums can vary wildly, as can the terms of the policy and the benefits.
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Also published on Medium.