Both income protection and mortgage payment insurance are excellent products when it comes to ensuring that you would have the money you need to continue making your payments if you lose your income. A loss of income could occur through accident, illness, or unemployment. Income protection would allow you to insure up to a certain amount of your own income, while mortgage payment insurance covers your mortgage payments.
Covering your mortgage payments each month is essential if you want to stay in your home. If you fall behind on your mortgage and fall behind, then you are looking at the lender taking you to court to seek repossession of your home. Even a single late payment would be enough for the lender to contact you and you would have to come to an agreement with them to catch up, if you can’t then repossession is imminent.
Mortgage payment insurance can be purchased only to cover mortgage payments. However, if you want to make sure you have the money you need to pay your mortgage and also continue to cover essential expenses, then you might want to consider income protection. Income protection allows you to cover up to a certain amount of your own income and then this is the amount you would recover if you needed to file a claim.
With income protection and mortgage payment insurance, you won’t have to worry about where your money is coming from. You wouldn’t have to make any lifestyle changes or juggle bills to keep on top of everything. You could meet the mortgage, pay off your loan or credit card expenses, and also meet the bills such as the grocery and utility bills that kept your home running and your family healthy and happy. Without it, you could find yourself in a downward spiral of debt and, in the case of late mortgage payments, lose your home.
Both income protection and mortgage payment insurance would start after you have been unemployed or unable to work for a fixed period of time. Typically this is in the region of around 30 to 90 days and then you would pay for 12 monthly payments or 24 monthly payments. After the period defined in the terms, coverage would cease. Income payment protection should not be confused with a similarly named insurance product called income protection insurance. The latter would pay over a longer period which, if necessary, may extend up to retirement age. However, there is a longer deferral period and the policy would not cover unemployment. It would only cover against the inability to work after suffering an illness or an accident.