Mortgage insurance products can be fairly straight forward. One product is mortgage life insurance, which guarantees that your home loan will be paid if you die. You can choose decreasing or fixed term, based on the kind of mortgage you have. The other kind of mortgage insurance is disability that will keep paying your monthly mortgage in case you become disabled.
But behind these basic policies, there are some choices buyers have to make regarding their policies.
In discussing a mortgage liability insurance policy, be sure you are clear on whether your broker is talking about a partial disability policy where you get a predefined amount during the disability period, or a residual policy where you get a percentage of your income.
A home owner could also pick a short term disability benefit whereby the policy would only pay benefits for a shorter, fixed length of time, such as two years. This is usually a policy for a homeowner who has another policy that would cover his expenses in at a later age.
Besides the kinds of insurance a homeowner can choose, there are number of optional features, or riders, that can be written onto a policy. Some of the riders usually offered are guaranteed future insurability, non cancelable policy, waiver of premium, inflation protection and guaranteed renewable policy.
Inflation Protection
An inflation protection rider will automatically increase the benefit dollar based ona cost of living index. This will protect the mortgage benefit from being too little to pay your future mortgage.
Guaranteed Future Insurability
If the value of the property grows, whether through normal appreciation or due to improvements, the value of the protection can grow with it, without any requirement for a new application.
Guaranteed Renewable Policy
As long as premiums continue to be paid, the insurance will be renewable, although premiums may be raised to maintain the same coverage.
Non-Cancelable Policy
With the purchase of this rider, the policy is renewable, and it is shielded from increased premiums.
Waiver of Premium
When you are collecting benefits under the policy, you will not have to continue to pay the premiums, if you choose this rider. This is to prevent any additional expenses during the length of your disability.
Related posts:
- What Everybody Should Know About Disability Mortgage Insurance Companies.
- Do You Understand Mortgage Insurance ?
- Life Insurance Toronto: Why Does Your Mortgage Insurance Cost What it Does?
- Ontario Life Insurance Quotes: Deciding on Your Mortgage Insurance
- Life Insurance Quotes Canada: Don’t Confuse Your Mortgage Insurance
