YOU ASK:

Will mortgage insurance pay my mortgage while my husband is sick?

WE ANSWER:

Mortgage insurance will kick in when you are not able to pay your mortgage because your husband is sick. However, this does not mean that your investment in the house is protected. Remember, mortgage insurance is there to protect the interests of the lender.

When you default on the payments, the bank can still have your loan paid off. This does not by any means guarantee that the bank or the mortgage insurance will not try to recover this money from you. They can try to get a deficiency judgment on you and attach all allowable properties to help pay off the unpaid portion of your loan.

So, yes, the mortgage insurance will pay the mortgage, but not to your benefit. What you need in cases like these would be mortgage protection insurance. This is a kind of insurance that will cover and protect against the possible forfeiture of your home because you were unable to meet your monthly mortgage due to your husband's illness.

Mortgage protection insurance covers some events that are out of your control and that can cause you to lose your home. It covers death, illness or injuries to the main breadwinner who pays for the mortgage. There are even some plans that cover for unemployment. A further extension of this would be coverage in case you as a wife are forced to leave your job in order to care for your sick husband.

However, you must be aware that there is a waiting period where you are expected to pay for the mortgage (presumably from your savings) before the insurance starts paying for the monthly mortgage amortizations. Depending on the plan you purchase, the insurance company will pay the monthly amortizations for as little as six months to as much as twelve months. This is deemed ample time for your husband to recover and to find gainful employment so that he can continue with the payments himself.

Mortgage protection insurance has some criteria for eligibility. Some companies require you to show that you have been up-to-date on your payments for the mortgage. You should also show proof of income and be the one named in the mortgage contract. The amount of coverage you have should also not exceed a specified percentage of your husband's or your monthly income.

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