How much does mortgage payment protection insurance typically cost?


Mortgage payment protection insurance would be around .2 to .3 percent of the mortgage or loan amount.

Of course, this depends on several factors:

  • The type of coverage. There are various coverages that may be included, such as protection against the payer's death, disability and unemployment. Of course, each component would charge an additional premium. A comprehensive policy that covers all of these (death, disability and unemployment) will be much cheaper since it offers the benefits as a package.
    • Mortgage Life insurance: For life coverage (as well as disability due to sickness), the premiums may be based on one's age, sex and general health condition.
  • The length of the payment period. Mortgage payment protection insurance may pay for as short as six months to as long as two years.
  • The benefit amounts. It also will depend on how much the monthly payments from the insurance will be. There are various ways of computing this, but generally, the benefit amounts are pegged as a percentage of one's monthly income.
  • Waiting Period. In most policies, there is a period by which the insured is expected to pay the mortgage amortization before the insurance starts to kick in. You can also choose the length of the waiting period, or to do away with it altogether. The shorter the waiting period, the more expensive your premiums will be.

The best way to go about knowing how mortgage payment protection insurance will cost to cover you will be to get some quotes from various insurance providers. The premiums may vary, whether it is provided by a specialist mortgage payment protection or from banks and lending institutions.

Don't just accept the first offer - especially the one provided by your mortgage company. Try to also shop around to see whether you can get lower premiums for the same level of coverage.

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