A mortgage is often the single biggest financial commitment that
many people make during their lifetime, yet fewer than half of
all residential mortgage holders choose to take on protection of
their mortgage repayment ability with mortgage protection
insurance.
Mortgage protection insurance, or mortgage payment protection
insurance, is a form of insurance that ensures mortgage
repayments are met should the mortgage holder become unemployed,
fall critically ill or be unable to earn income due to an
accident. This type of protection insurance product is quite
cheap to maintain, and allows mortgage holders to set an
insurance amount for monthly protection pay-out that covers
mortgage costs and additional expenses up to a set percentage
above mortgage outgoings.
Most mortgage payment protection insurance policies are strict
on protection insurance claims. For instance, should the
mortgage holder become unemployed through their own free will,
then they would not be covered by the mortgage payment
protection insurance policy. However, redundancy does qualify
for payment through the protection insurance policy, providing
that the mortgage holder actively seeks new employment.
Additionally, mortgage protection insurance may not pay out if
the claimant takes on voluntary or part-time work, although the
protection insurance terms & conditions relating to this area
will vary with each type of mortgage payment protection
insurance product.
Typically, mortgage holders will have to endure a mortgage
payment protection insurance qualifying period before receiving
payment protection pay-outs. The qualifying period on mortgage
payment protection insurance policies is normally 90 - 120 days.
If the mortgage holder is still eligible for mortgage payment
protection insurance after this period, then protection payments
are commenced on a monthly basis.
Insurance companies often require holders of mortgage payment
protection insurance to renew their mortgage protection
insurance claim every month by completing a form. Sometimes the
insurance companies will request evidence from the mortgage
holder so they can evaluate the mortgage holder's eligibility
for the continuation of mortgage protection insurance payments.
This could be a doctor's note of illness or copies of job
applications if claiming mortgage payment protection insurance
pay-out because of redundancy. Mortgage payment protection
insurance pay-outs are normally paid directly into the mortgage
holder's bank account one month in arrears.
Pay-outs on mortgage payment protection insurance are often
limited to a set insurance period. Depending on the insurance
company, monthly protection payments over six months or twelve
months from the first mortgage protection pay-out is normal. As
two out of every ten people who are made redundant take over a
year to re-establish themselves in a new job, mortgage payment
protection insurance could mean the difference between keeping
your home or losing it.
About the author:
Gary Tallon has been writing in the finance industry for over 10
years and is currently working with
life insurance for
Power Insurance.com.
