Mortgage payment protection insurance

Continuing further from the previous article about Critical Illness, let us today talk about the insurance for mortgage payment protection or commonly known as Mortgage payment protection insurance.

Mortgage payment protection (also called accident, sickness and unemployment insurance) is an excellent insurance scheme as it takes care of the undesirable situations when your income stops. A typical policy will start to pay your mortgage repayments one month after your income stops due to redundancy or job loss, accident or illness, and continues to pay for the next 12 months. This insurance cover can be very beneficial in case you are in a bit dodgy kind of a job, where the chances of redundancy are quite high. Hence, if you are made redundant by your employer, or you are unable to get your income due to sickness or accident, then this mortgage payment protection plan will take care of you.

But the first question: Do you really need Mortgage payment protection insurance?

You don't have to have this type of cover at all (unless it's a condition of your loan) and you certainly don't have to buy it from your own lender, so shop around for the best deal for you. But this insurance is very suited if you have taken a loan or mortgage and are planning to repay it back from your salary or income. In case you loose your job or fall sick such that you are unable to work, then your loan or mortgage payment will not be paid on time, and you will end up in a financial distressed situation.

If you take the Mortgage payment protection insurance, then it will make sure that atleast your payments for your mortgage of loans are honored on time and you don’t loose your house due to failure in making payments. Hence, secure this Mortgage payment protection insurance if you are a salaried person and have income mainly from your salary, along with the commitment to fulfill your loan or mortgage obligation.

Hence this insurance policy or scheme is also called Mortgage payment protection insurance scheme.

To explain in detail, Mortgage payment protection insurance scheme is a special type of insurance policy which falls under a more general insurance cover called Payment Protection Insurance. Where Mortgage Payment Protection scheme is specific to covering the mortgage related payments, the general Payment Protection insurance scheme is there to cover all kinds of payments (including mortgage payments), in case you falls sick or meet an accident and are unable to get your salary or income.

Let’s talk about the general Payment Protection Insurance Scheme tomorrow in a next article in detail.