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Mortgage
Protection Insurance
(and
Dancing)
Mortgage protection
insurance comes in a couple of different varieties. With mortgage
protection insurance one can protect a home after loss of job
or loss of life. Mortgage protection insurance that covers your
mortgage payments when you die is really mortgage protection life
insurance. This type of mortgage protection insurance may not
offer as much as a term life insurance policy, so a comparison
should be made between these two types of policies, when deciding
how best to protect your family.
Mortgage protection
insurance for your life can also be extended to that of your spouse
as well and is generally much cheaper than buying two separate policies.
When applying for this type of policy, insurers take the applicant's
age, whether they are a smoker or non-smoker, and the value of the
death benefits into account. In addition, the premium stays stable
over the life of the policy.
The other type of mortgage
protection insurance covers mortgage payments during job loss. This
type of insurance may not cover self-employed workers or contract
workers or active military personnel. Benefits of the job loss mortgage
protection insurance may be paid directly to the mortgage company
and not the home owner. In addition, some insurers can opt out of
writing policies for regions hard hit by lay-offs and high unemployment
numbers.
Mortgage protection
insurance should not be confused with Private Mortgage Insurance.
Private mortgage insurance (PMI) offers limited protection
in that it only pays off a portion of your loan if you default,
whereas mortgage protection insurance will pay off your
entire loan when you die or helps you with your payments
because of job loss. If you've purchased a home with less
than a 20-percent down payment, your lender most likely
required you to purchase private mortgage insurance. Private
mortgage insurance will get you into a home, but mortgage
protection insurance keeps the payments steady during rough
times.
Fiction:
Mortgage protection insurance is not really necessary. You
can't hide from Mother Nature nor can you from BP oil spills
and other manmade disasters. In other words, we are all
screwed. We are all going to die. Bad things will happen
to all of us. Having mortgage protection insurance only
gives us the false sense of control over our environment.
So rip up your policy now and dance around naked. You are
free.
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