We all deserve to own a home. But getting one can be a costly affair once the monthly repayments are taken into account. It's all good if you have a steady job, but then again, there's no telling what could happen in the future. What if you get sick and become unable to work, where would you get the money for your monthly repayments? Of course the repayments continue even if you're out of work. Miss those entirely and you'll be at risk of losing your home.
That is why there's such a thing called mortgage protection insurance. Lenders sometimes require this to borrowers who they deem as high risk, especially those who borrow an amount close to the actual value of the home.
How Mortgage Protection Insurance Works
Let's say that your employer told you that you would be out of work in a month. You could already start receiving benefits at this stage if you have mortgage protection insurance. Depending on your specific policy, you could receive monthly benefits up to 24 months. This period provides you with more than enough time to find work and put your finances back on track.
Like other types of insurance, you need to meet eligibility requirements set by the insurer to be able to make a claim. Examples of these include: when you're pregnant, if you have a persistent medical condition, or if you lost your job within a 60-day period when you took out the policy. Conditions such as the examples could prevent you from receiving benefits altogether. Thus, it's important that you talk to the lender first about their specific requirements before you sign up with them.
Is Mortgage Protection Insurance for You?
While there have been massive cuts to interest rates recently, there's no telling where the economy will go in the next few years. If you are unsure about your job prospects in the future, or are concerned about your family in general, it makes sense to get mortgage protection insurance as soon as you get a loan from a lender.
It also helps to find a personalised insurance for you, as your needs are different from your friends and relatives. Here at Rate Detective, our professional advisors are ready to assist you. They will assess your specific needs and personal circumstances, so that they can provide you with rate comparisons of Australia's top insurers that are tailor-fit to your needs. Contact us today!