Mortgage protection is a term that is often confused with mortgage insurance. The latter protects the lender if you should default on your payments for any reason. The former is a type of insurance that covers you for the payment of your mortgage, should disaster in the form of disability or illness strike you. As its name suggests, it protect you from defaulting on your mortgage repayments due to the inability to earn income. Another name for mortgage protection could be disability cover as it provides insurance in such a case.
It also provides insurance – but for a lesser amount of time – if you become involuntarily unemployed. While each insurance company has mortgage protection cover that is a little different to the next one, basically if you suffer illness of injury or are unemployed your mortgage payments are taken care of for up to 3 months. It could be just enough to get you out of trouble.
For many people the mortgage is their largest monthly expense. It is also one of the most important seeing that it gives you a home to live in. What would happen if suddenly you could not afford to make those repayments every month? Losing your home on top of whatever disaster it was that caused you to default in the first place would certainly cause your stress levels to soar.
Mortgage protection insurance will provide you peace of mind.