Income and mortgage protection are two types of insurance protection that are often provided within the terms of a comprehensive insurance package. This type of package serves to alleviate the potential for losing a home in the event that the homeowner loses a job or is incapacitated for a period of time, and is unable to generate income to cover the mortgage. Along with preventing foreclosure due to defaulting on the mortgage, this combination of income protection and mortgage protection also provides additional benefits that help to cover other household expenses that would normally be managed by salary or wages earned from a job.
To understand the scope of income and mortgage protection, it is important to consider the function and benefits of each of these two types of coverage. Mortgage protection insurance provides payments to the mortgage company in the event that the homeowner loses his or her job and is unable to keep making the payments. Most policies of this type require that the homeowner have the coverage in place for at least six months before being able to receive any benefits. Typically, the plan will also have a waiting period of up to three months after the job loss before approving any claims. It is not unusual for the benefits to be made retroactive once the claim is approved.
The income coverage of an income and mortgage protection plan goes above and beyond simply covering mortgage payments after a job loss. The benefits from the income protection insurance can be used to manage other household expenses, or even other debt obligations such as car loans. While insurance coverage of this type can be expensive, the total benefits provided by this arrangement can make the difference between remaining financially stable, and losing a home while also destroying a credit rating.
As with all types of insurance coverage, it is important to remember that the scope of benefits included in an income and mortgage protection plan will vary. For this reason, consumers should read the terms and conditions of each plan closely, then compare those provisions with similar plans offered by other providers. The idea is to identify the scope of coverage that provides the highest level of benefits for the lowest premium possible. Also keep in mind that investigating the provider offering the income and mortgage protection is also important. Doing so increases the chances of working with a reputable and reliable provider, and avoid being involved with a provider who is known to exhibit questionable ethics.
