Most people work long and hard to pay for a home of their own, and want to protect it.
If anything happens to you, either death or disability, you probably want to know that your family will not have the home you have worked so hard to get plucked from them. Mortgage insurance is the way a homeowner can assure this. There are two types of mortgage insurance, a life policy and disability insurance.
In most cases, if the salary of the main breadwinner is threatened, the family will not be able to continue to pay for the home.
Even though any type of life insurance is difficult to think about because it involves the thought of death, one has to face these possibilities. If a family head is concerned that his or her family will become homeless because of loss of his or her income, the most sensible solution is mortgage life insurance.
The benefit of a mortgage insurance policy covers the payoff of the home loan in case of the insured’s death. There are two types of these mortgage policies, but decreasing term, whereby the amount paid out reduces as the balance of the mortgage goes down, is the most popular.
Mortgage disability insurance, on the other hand, is designed to let the payments on your mortgage to continue in the event you are disabled due to an accident or illness and cannot work and earn a salary. In this case, the mortgage is paid out of the benefit of the policy. Even though some people may have disability insurance from their job or the state, the benefit is often not enough to cover all expenses, therefore additional insurance such as mortgage disability insurance is required.
As a matter of fact, mortgage disability insurance may be a better choice than mortgage life insurance because the possibility of a wage earner becoming disabled are greater than of his death.
There is the added complexity that many households could not even afford a home if both partners were not employed, and they should have a joint policy. It would not be out of the realm of reason to imagine two income producers becoming disabled because of an accident, but with this type of policy, the home is still be protected.
Learn more about assurance hypothecaire and remember to check assurance hypotheque
Tags: Finance, home loans, Insurance, Mortgage