Mortgage Payment Insurance
Mortgage Payment Insurance is a type of added protection to stop the repossession of your home if you are unable to make the monthly mortgage payments due to involuntary loss of your job or illness. This type of insurance is not mandatory for a homeowner to carry, but without it, there is no fall back to stop your house from being taken by the bank if foreclosure procedures are filed.
The type of coverage depends on the policy that is taken out. There are some that cover the cost of your mortgage payments until you are able to return to work while others pay off the mortgage in case of a death to the primary provider of the household.
A good policy is one that will cover the mortgage payments for up to a year if the primary provider is hospitalized or lose their job involuntarily. This does not cover people that quit their jobs for any reason. This insurance assumes the home owner will find a new source of income within this year and take over the mortgage payments then.
This type of insurance is not eligible for everyone. The self employed, part time workers or short term contract workers that do not have a valid long term source of income are ineligible due to their lack of secure funding. The risk is too high for the insurance provider. If the person has a preexisting medical condition that could cause them to be unable to work would also not be covered by any policy.
Mortgage disability insurance rates that cover Mortgage Payment Insurance cost between $20 a month to $200, depending on the specific policy that is taken out. Read the fine print of any policy before you sign it.