What type of home-owners insurance will pay off my mortgage if I die or lose my job?


Mortgage protection insurance is the coverage you need if you are concerned about losing your home due to your inability to pay off your mortgage because of death. As for unemployment, you can add this on through a job-loss rider. There are also mortgage protection insurance products that offer comprehensive cover - death, disability and unemployment.

Mortgage protection insurance protects you family in the event of your death or if you lose your job. A home mortgage is one of the heaviest debt that a family has to face and when the bread winner loses his ability to pay for this, your family will have to grieve not just for your loss, but for the loss of their home as well.

What happens is that when you make a claim due to a covered cause (death, disability or unemployment), the insurance company will be the one to take up the remainder of the mortgage in your favor.

This is in contrast with mortgage insurance, where the insurance company will also pay for the outstanding mortgage balance, but this payment is not credited for you but is mainly for the protection of the bank.

Another option to help protect against losing your home would be to get life insurance in the amount that takes the need to pay off the mortgage into consideration. You can also add disability benefit with this. However, this will not protect you in the event that you lose your job. Thus, you should get mortgage protection insurance as part of your "insurance strategy". This will be based on your individual financial needs.

The best thing you can do is to get mortgage protection insurance coverage by yourself or with the help of an insurance agent and not through your lender. That way, you maintain control of your policy and also retain the right to name who your beneficiaries will be.

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