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Unable to make payment? Avail Mortgage protection insurance

Posted on: 03rd Apr, 2004 02:09 am
Borrowers unable to pay their mortgage dues due to accident, critical illness or lack of employment can get out of their debts with the help of mortgage protection payment insurance (MPPI) policy. The MPPI, also known as the ASU or Accident, Sickness & Unemployment Insurance includes a combination of insurances.

The features and aspects of the MPPI policy are given below.

  • An MPPI can provide you with benefits to cover up your mortgage related expenses and other costs on a monthly basis. You are free to choose the total amount of benefit except in some cases where there are restrictions on the maximum limit. You can receive the benefits for a maximum time period of 1 year.

  • It is better if you shop around so that you can avail the best MPPI policy. There are some mortgages that come along with free MPPI for 6 months or a year. But in case you are about to consider a remortgage and increase the loan amount, your MPPI coverage will also increase. The costs of payment protection insurance vary depending on your loan program.

  • There are various policies involved with MPPI thereby allowing you to choose the benefit you require. This implies that you can opt for benefits for accident and unemployment or sickness only or all the three. Usually all the policies have a deferment period, that is you have to wait for some time before you start getting the financial assistance from the policy. You may also be allowed to set the deferral period of your own.

  • As per the rules and regulations of the Department of Social Security, homeowners having bought their property after 1st October, 1995 should wait for 9 months in order to receive their MPPI payments from their states. These ASU benefits cover up with the interest on the first $100,000 of the loan amount.

Critical illness insurance:
This kind of insurance is included within the MPPI policy. It helps you in case of extreme illness by providing tax free benefits with the maximum benefit varying from $100,000 to $250,000. The benefits are usually paid within 28 days of medical diagnosis. But you are allowed to seek these benefits only once. Critical illness also allows you to avail life insurance coverage throughout the life.

Mortgage payment protection insurance undoubtedly helps you with cash when you are unable to pay for the mortgage on account of disability or unemployment. But before you apply for an MPPI policy, it is better to enquire about the amount of premiums required, the type of policy available, the possible rates, the amount of coverage and the term for which you can get the benefits. Finally you need to compare different policies and then select the most suitable one.

Related Forum Discussion
How do you apply for mortgage protection insurance
Posted on: 15th Jun, 2006 11:36 pm

You can apply for the protection insurance by approaching a few insurance companies and then selecting the policy that will provide you with the maximum benefits. However, your lender may also suggest a particular company.

Posted on: 15th Jun, 2006 11:43 pm

In most cases, it is the lender who decides upon the company that will provide borrowers with the mortgage protection insurance cover. For first time buyers, the lender may offer the insurance as a part of the package. The homebuyer may accept the offer or he can take out the insurance policy from another provider.

But whether you accept the lender's offer or choose the insurance company yourself, the quotation of the premiums will depend mostly on the rate of interest and the loan term.


Posted on: 16th Jun, 2006 12:42 am
I'm looking for payment protection before I prchase my new home can you please email me a phone number to call.
Posted on: 25th Aug, 2008 12:55 pm
Welcome Patrick.

You can contact with any insurance company to get the Mortgage protection insurance. You can also look for mortgages that come with free Mortgage protection insurance for 6 months or a year.
Posted on: 26th Aug, 2008 06:34 am
morgage protection on $100,000 loan
Posted on: 17th Mar, 2009 09:22 pm
Hi margaret,

Getting a mortgage payment protection insurance on your $100,000 loan is a good decision. I think you should start shop around and approach a few insurance companies and then choose the policy that best suits your requirements.
Posted on: 18th Mar, 2009 05:47 am
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