For many people, purchasing a home is a dream come true, but doing so may also be one of the most substantial investments made in your life. Mortgages come with significant risks, especially if a life-changing event occurs, such as your death or that of someone else financially responsible for making payments. With that in mind, homeowners should take steps to ensure their mortgage can be paid if something happens.
The insurance experts at Protective Risk Agency are well-equipped to help residents in the Hammond area understand mortgage protection insurance.
How Does Mortgage Protection Insurance Work?
Mortgage protection insurance, also known as mortgage life insurance and mortgage protection life insurance, is a type of coverage that pays off the remaining balance of your mortgage if an insured party dies. While standard life insurance policies payout to listed beneficiaries, such as your family, mortgage protection policies provide funds directly to your bank or lender. It may also be possible to augment your coverage to include financial assistance triggered by life-changing events other than death, such as losing your job or becoming disabled.
Who Needs Mortgage Protection Insurance?
In most cases, mortgage protection insurance is not required. This type of policy should not be confused with private mortgage insurance, which is more often required by banks or lenders. But even if it is not a requirement, homeowners should consider this coverage.
If your income is integral to maintaining mortgage payments, unfortunate circumstances could jeopardize your living situation and lifestyle. Without an adequate mortgage protection policy, your family or loved ones may be required to manage a difficult financial situation and could even lose the home.
How Much Does Mortgage Protection Insurance Cost?
The cost of an adequate mortgage protection insurance policy will vary based on several factors. In most cases, providers will consider the following criteria:
· Your age
· Time and monetary amount remaining on your mortgage
· Your tobacco habits (e.g., smoking status)
· Policy details (e.g., number of insured parties, riders)
Get the Right Coverage
Buying a home can be an excellent investment, but like any significant purchase, it comes with responsibility. After agreeing to the terms of a mortgage, you are accountable for repaying your lender, regardless of unfortunate incidents or circumstances. Without acquiring and maintaining a suitable mortgage protection insurance policy, you and your family may be at risk of having to sell your home or having it foreclosed on if you cannot make your payments.
The agents at Protective Risk Agency can help ensure that doesn’t happen. Our agents have the knowledge and experience to analyze your specific situation and build an optimal mortgage protection policy. Contact us today to get started.
This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.