There are not a lot of varieties when it comes to mortgage insurance products. Mortgage life insurance pays down your home loan if you pass on. You can pick decreasing or fixed term, based on the kind of mortgage you have. There is mortgage disability insurance, which is intended to guarantee that your mortgage payment will be made in case you are disabled and cannot work.
But behind the basic policies, there are some choices homeowners have to make in terms of their policies.
For example, a mortgage disability policy can be one with partial disability benefits and the beneficiary is paid a certain amount during the defined period of the disability or it may be with residual benefits where the beneficiary is paid benefits in proportion to his loss of income.
You may have a choice between short term disability insurance in which the policy will be for a maximum term of, for example two years. This is usually a policy for a homeowner who has another policy that would kick in at a later age.
There are also a number of riders that will be offered to a policy purchaser. They may be: guaranteed renewable policy, non cancelable policy, guaranteed future insurability, inflation protection and waiver of premium.
Inflation Protection
With this rider, inflation is factored into the benefit, so that your disability payments, for example, will go up as the cost of living goes up. This will protect your mortgage benefit from being too little to pay your future home loan payments.
Guaranteed Future Insurability
The value of your residence may increase due to market forces or improvements you have made, but if you buy this rider, you will be guaranteed that you can increase the insurance to cover it, without re-applying.
Guaranteed Renewable Policy
You will always possess the right to renew the policy, however the insurer reserves the right to increase premiums.
Non-Cancelable Policy
With the purchase of such a rider, the policy is renewable, and it is shielded from increased premiums.
Waiver of Premium
Another popular rider is one that that allows for the premiums on the policy to be waived when benefits begin. It would be a difficult financial load to have to continue to pay the premiums on the insurance after you have become disabled.
Tags: home, insurance, Life Insurance, mortgage, mortgage life insurance, property insurance, real estate