Mortgage Repayment Insurance: What You Need to Know

Information verified correct on December 7th, 2016

Consideration for Mortgage Repayment Insurance

One of the biggest investments you will make in your life is a house. Getting your own house gives you the kind of stability that comes with the knowledge that you and your partner are really serious about starting and building your family and life together. Thus, most of your money might go to your dream house as you continue to build a life together with your kids.

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However, there are unexpected things in life that can pose a serious threat to everything that you have built. These things might include unsteady economic climate, accidents, and many more. If these unexpected and unfortunate things happen, it can greatly affect your finances and will force you to change your lifestyle, worst of which will have to let you give up some things.

Thinking about these scenarios might raise fear and anxiety in you and although you might want to dismiss them, the fact is that unexpected things happen because life is constantly changing. The good news, though, is you can put your fears of losing your investments to rest by drawing up the proper protection. Protection that will preserve your house and other investments even in the toughest of times and that is through mortgage repayment insurance.

Mortgage Repayment Insurance and its Benefits

As the name suggests, mortgage repayment insurance is an insurance product designed to cover your mortgage payments when you are unable to pay them because of an injury, illness, or unemployment. Simply, if you are unable to pay for your house mortgage, you don't have to worry about them if you have mortgage repayment insurance.

Depending on the policy you purchased, mortgage repayment insurance can cover you for as long as 12 months. Aside from this, getting protection for your mortgage promises a number of benefits for you and you precious investment.

  • It keeps your payment up to date. One thing that is possible to happen when you get sick or injured is to keep up with your monthly mortgage repayments. Even if you have some savings stashed away in the bank, you may still have other expenses you need to pay that can put such strain financially and emotionally. With mortgage repayment insurance, you have the peace of mind that no matter what happens you will be able to make up-to-date payments to your mortgage.
  • You get immediate help if you become unemployed. Some mortgage insurance policies cover your mortgage repayments as soon as you are declared unable to work because of a sudden disability or retrenchment. Therefore, you must be aware what your insurance policy can or cannot do. This disability benefit is effective if your disability lasts more than 28 days or the monthly benefit you will receive will not exceed $3,000.
  • Your mortgage still gets paid even when you die. Although you don't want to think about it, death is an inevitable reality for all people. If you happen to be the breadwinner of your family who takes care of everything, your death will be a big blow to your family. They may end up losing everything, including the house you have built. With mortgage repayment, your mind can be at ease with the fact that even when the worse happens your family will not lose the hard-earned investments you have prepared for them because they have something to fall back on. Most mortgage repayment insurance has a death benefit of up to a maximum of $250,000.
  • It pays your mortgage if you suffer a trauma. Trauma includes critical illnesses which will render you unable to work. A mortgage insurance policy will pay you a benefit of up to $50,000 if you suffer trauma.
  • It is easy to purchase. Getting mortgage repayment insurance is easy because you do not have to undergo medical check-ups or answer a number of questionnaires.
  • There is a cooling off period. The cooling off period is similar to a trial period where the insurance provider will give you a certain amount of time after you purchased the policy. During the cooling off period, you can cancel your policy without any extra charges if you feel that this is not what you are looking for.
  • You get discounts if you have a joint policy. If you and your spouse get mortgage insurance from your joint policy, most insurance providers will give you a discount on your premiums.
  • You still get paid regardless of your sick leave benefits. The benefits you will receive from your mortgage insurance policy is not dependent on the other benefits you receive, such as sick leave pay. Therefore, it will be an additional income for you while you are recuperating from an illness or injury.
  • You get 24/7 protection. As long as your policy is still paid for, you have cover anytime of the day. As for the location, you need to check with your insurance provider if the cover includes when you go overseas.

Having second thoughts is just natural; however, a decision to give yourself and your investments cover is a wise move that shows great foresight. Do not leave everything to chance and regret the result of your indecision now.

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