Finding the right insurance will depend on what kind of cover you want. If you are looking for an insurance that will cover your mortgage in case of sickness, injury or unemployment, then a mortgage protection cover plan could be what you need. But, doesn’t income protection insurance do that also? Let us look look a little closer at these two types of cover, and see what they do, and don’t do for you.

What do they cover for?
Mortgage Payment Protection provides cover for your mortgage. If you fall ill, lose your job, and cannot afford your mortgage payments this policy will make sure they get paid. It is a good idea to have some kind of safety net to protect your home in case you lose your source of income. The cost of this type of insurance will depend on the size of your mortgage and the specific cover you choose.

Income protection insurance is not mortgage insurance. It offers you cover on your income not on your mortgage. This means that if you lose your job, or your income is affected in a way covered by your policy your earnings are protected up to the amount agreed. You can use this money for anything you want, including mortgage payments. The expense of this insurance cover will depend on the level of income you wish to insure not on your mortgage.

What are they used for?
The main difference between these two types of cover is that payment protection provides short term cover, from 1-2 years, after which the borrower must find another way to pay for the mortgage. This generally provides adequate time for borrowers to restructure their finances, and either find an alternative income, or sell the house.

Income protection policies, on the other hand, can provide cover for loss of income up to retirement and beyond. One covers your mortgage while the other covers your income. Prices for these types of insurance are very different, and should not be considered as an alternative to each other. Choosing one or the other should be a decision you base on if you want your income or your mortgage protected.

If you think you could benefit from mortgage payment protection cover then you should contact a qualified financial advisor or insurance broker. They can provide more information and advice based on your specific circumstances.

What is Mortgage Insurance Cover?
In the simplest of terms, mortgage insurance cover is just an additional plan of coverage a homeowner can purchase, in addition to their primary coverage, to cover the cost of their monthly mortgage expense in the event that the homeowner is unable to pay them. If that should occur, the insurance company will pay the mortgage payments. The premium, or the amount you pay each month to keep this insurance active, is set at the time of purchase and stays the same during the entire life of the policy.

Why would I need Mortgage Insurance?
A homeowner can need mortgage protection cover insurance if they lose their job due. Depression, recession and myriad other economic crises can effect the job market and unemployment rate. Even if a homeowner has had steady employment for many years with the same company, industrial downsizing in response to a struggling economy does happen. In cases like these, the homeowner loses her job and the insurance company takes over payment on the mortgage.

Another instance mortgage protection insurance can help is in the case of a tragic event. If the sole payer of the mortgage is a husband with a wife and children residing there, they would be homeless is he should die. Having mortgage protection insurance makes sure that the payments are taken care of and the surviving family is not in danger of losing the house to the mortgage company.

How to Get Mortgage Protection Insurance

Contrary to what many people believe, most mortgage protection insurance cover policies are purchased with their life insurance not their homeowners insurance. It is a particular type of death benefit that can also include lose of income. At the onset of these policies the insurance agency was only required to pay the remaining amount of insurance the homeowner owed. Recently, however, insurance companies have begun to pay the entire amount of the original policy regardless of how much is still owed. Homeowners contact term life insurance salesmen or an insurance company and ask for a representative to contact them. At that point all options for the homes insurance will be discussed and debated by the homeowners and the insurance representative.

The Difference Between Insurances

Homeowners insurance is required by lenders because it protects the home against acts of nature, damage and other potential sources of loss. This type of insurance also protects the homeowner in the event of a fire or unfortunate conditions that would leave their home in less than living conditions. In some cases lenders require what is known as PMI or private mortgage insurance, to protect their investment from default by the note’s holder. Granted those insurance options are crucial, however they are not the amount of protection that a homeowner or families needs in the case of a death. Mortgage payment protection cover is a type of insurance that the homeowner can purchase to protect their home and family in case of their death.

How Mortgage Insurance Cover Works

Homeowners make monthly premiums that will pay their home off in the case of their death. That allows the family to remain in the home and is one less thing that they would have to worry with or take care of. This type of insurance only covers the mortgage; however it is beneficial as it provides security for the family. Mortgage protection life cover is generally offered at the closing of the purchase of the property, however many companies offer this type of coverage for up to 5 years after the purchase. That allows for homeowners that did not have the option or want the coverage at that point, to make the purchase at a later date. Many insurance companies offer what is known as ROP or a return of premium at the close of the mortgage note. This means that when the mortgage is paid in full, the premiums are returned to the homeowner, making it a nice savings.

Specific Coverage Information

As with any type of insurance, Mortgage protection differs and can be customized to the homeowners needs. Premiums are generally
based on the medical condition of the homeowner and the value of
the home. Other habits such as smoking or previous medical
conditions might cause the premium to be slightly higher. Mortgage protection
cover is a worthwhile investment as it provides security for families in the most difficult of times. The insurance is recommended to all homeowners as it gives them piece of mind that their family will be protected in the case of their death.

Compare Home Insurance is a good site if you are looking to compare home insurance rates and find a good deal.

There are basically two ways to get mortgage payment protection insurance. The first one is to obtain it from your mortgage lender when you apply for a home mortgage. However, this method has been widely criticized by a large number of people. It is not advisable to purchase the policy with the mortgage because the purchaser has to pay premiums for mortgage as well as the mortgage protection insurance. This burdens the purchaser and he, sometimes, fails to make the payments. The second method of purchasing mortgage protection cover is to get in touch with an independent provider. Instead of searching for a suitable provider, you should consult an online research and compare quotes of various insurance providers. This way, you will get to know about the cheapest rates without having to go to different providers. While purchasing a mortgage insurance policy, you should choose the one with minimum exclusion period.

Depending upon your mortgage, you can purchase any of the two types of mortgage protection insurance. The first is the decreasing term insurance and the second is the level term insurance. People with decreasing repayment mortgage should purchase decreasing term insurance. On the other hand, level term insurance is for the people with mortgage that remains the same throughout the mortgage period. Both types of mortgage protection insurances have terminal illnesses benefit. If the homeowner is diagnosed with a terminal illness, the insurance company pays off the mortgage off there and then, without waiting for his death. You can also add the critical illness benefit to any of the protection insurances. This benefit will help you claim for the money, if you are diagnosed with a critical illness. In case, you recover from the disease, your insurance will no longer be valid. Critical illnesses are defined by your insurer and vary from company to company. Therefore, it is important to check the terms and conditions before applying for this benefit.

What is it?
Mortgage protection cover is a security that protects lenders in the case of a borrower defaulting on his mortgage payments. If a borrower defaults on his mortgage the title to the property goes to the lender, however there are many expenses associated with this operation, which are often left to the lender to pay. Private mortgage insurance reduces or even eliminates this risk to the lender by covering these costs. It is important to understand that home mortgage insurance is not the same as home insurance. It does not provide insurance for the house. It is simply a security for the lender in case the borrower forecloses on his mortgage.

Who is it for?
As mentioned above, the insurance is actually for the lender. The borrower does not benefit directly from the cover it provides. However it can be of benefit to all home buyers in an indirect way.

How can it benefit borrowers?
It allows people to buy a home sooner. This is because borrowers with mortgage insurance can put down a lower down payment. Lenders are willing to accept down payments as small as 5% or 10% if the borrower has insurance. Without it borrowers are expected to pay at least 20% up front. This can make the difference between being able to afford a new home or not. Borrowers can also use the lower down payment to buy a more expensive home or to pay for moving expenses.

Who pays for it?
The borrower does. There are a number of premium plans though, that adapt to the borrowers personal circumstances. You can pay annually, monthly, or even with one single premium. Single premiums are a onetime payment that covers the mortgage for the entire lifetime of the mortgage. This type of premium is generally financed by the mortgage itself which means that the borrower does not “feel” the cost of insurance as much.

Mortgage insurance is yet another expense for borrowers, but it does provide benefits. First of all it helps lenders accept loan applications from higher risk borrowers. Second it allows borrowers to pay a lower down payment on their home, helping them to buy a home sooner. However, not all borrowers need to pay for it. Borrowers with a high credit rating should be able to find lenders that do not require them to buy it.