Mortgage Payment Protection Insurance

For most people, buying their own house is the biggest project of their lives, especially those who have a family. However taking up a mortgage is a long-term commitment. We can never tell what the future may bring. In today’s economic climate, buying your own house is equally important as ensuring that you won’t lose it in case of unexpected life events.
Mortgage protection, along with other insurance policies, has gained popularity with economic recession. Being made unemployed or redundant can be a huge blow to your finances, especially if you are the primary wage earner in your household. Whilst you want to maintain your lifestyle, you also want to make sure that don’t loose your most important asset – your home.
Because of the overwhelming mortgage payment protection policy providers in the market, it is difficult to decide which one you would sign up with. It is important that you sit down and consider your coverage requirements so that you won’t end up paying for an insurance that won’t really work for you when you need it. Here are a few questions that you need to inquire in order for you make a wise decision in choosing which policy to take and which insurance provider you would like to go with.

• How much of your mortgage needs to be covered? Do you require additional coverage to pay bills as well?
• What do you want to be covered for? (Unemployment or redundancy, sickness, accident, disability or death) Some policies can cover you for all of these events but you may want to check if you could save money if you would take them separately, especially if you already have an existing policy that covers one of these.
• How long would you want to be covered for in the event of sickness or unemployment? On the average, mortgage payment protection policies would cover you for 12 months of unemployment but there are some cheaper ones that would cover you only for 3 months which is just enough time before government assistance kicks in.
• When would you need your policy to be paying out should you stop working? Some insurance providers pay out 30-60 days after the event.
• Do you have any pre-existing conditions that needs to be covered or that may prevent you from making a claim?
• Is the insurance cover a decreasing value? More and more insurance providers are now offering decreasing value insurance. This means that the premium you’re paying reduces as you pay off your mortgage.
• Is the underwriting company financially stable? What is their payment history?

Getting a mortgage payment protection may be an additional cost that you’d rather avoid. Knowing that you have something to cover you in case the unexpected strikes gives you a peace of mind. Nothing could be more frustrating than getting your home repossessed after years and years of payment while you or your family is still struggling on how to cope from this potential crisis.
If you are still unsure of what action to take, you can consult a licensed financial adviser who could guide you through the process. And most importantly, before you sign the policy documents, read carefully the terms and conditions, especially the fine prints so that you fully understand every detail of it. It is also advisable for you to review your policy and your general financial condition on a yearly basis to ensure that the policy you have still meets your requirements.