Mortgage Protection Insurance
What Is Mortgage Protection Insurance?
For many people, a house is the biggest asset they own. Usually home ownership is secured through loans or financing, so if something should happen to a breadwinner before the house is paid off, surviving household members may face significant (and in some cases impossible) financial hurdles. And this happens during a period of grieving and addressing other financial concerns.
Mortgage Protection Insurance can provide peace of mind to homeowners and ensure their family has a home in the event of loss. Similar to other types of life insurance, mortgage protection insurance secures a death benefit amount. However, mortgage protection insurance differs from term and whole life insurance in a few ways, such as:
- Guaranteed approval. Unlike most life insurance, mortgage protection is available regardless of health conditions.
- Some mortgage protection policies may cover limited periods of job loss or disability.
- Unlike term life insurance, the policy value can decrease as your mortgage balance decreases.
Can't I Just Get A Life Insurance Policy?
You may be asking yourself if it is really necessary to obtain mortgage protection insurance when a term life or whole life policy may suffice. And true, with these policy types you may be able to secure a death benefit amount that will cover the remainder of a mortgage. But mortgage protection insurance is not subject the same underwriting most life insurance is, meaning individuals in poor health can obtain coverage.
Additionally, it may make sense, from a cost/benefit perspective to choose mortgage protection insurance over other types, or to have both a mortgage protection policy and a life insurance policy.
What will be right for you will depend on your unique situation, which is why it can be very beneficial to meet with a professional.