Apply for a Mortgage Protection Cover that includes Loan Protection Insurance
Applying for a mortgage protection cover that includes loan protection insurance ensures that the policy holder has a monthly and tax-free income despite being without a job. Unemployment may be as a result of redundancy (due to company closure or staff cutbacks), illness or accident.
A Loan Protection Policy can be applied to a personal loan, credit card receipts, car loan or other financial loans. However, specific requirements must be met by the applicant before he can get this insurance. He must be fully employed at the time of application, must be between the ages of 18 – 65 years old and other prerequisites that the insurance company requires. The policy permits the holder to have a source of income for a specified period, which is indicated in the insurance contract.
The cost of this insurance also depends on several factors such as: age, where you live, the type of coverage, type of policy and your credit history. Your monthly premium will depend largely on your credit history and score. A higher monthly premium will be required from you if you have a poor credit history or a low credit score.
The time span and waiting periods for loan protection insurance
In the event that you meet an accident, get sick or lose your job, a monthly payment will be issued to you for a specific length of time. This can range from 12 – 24 months, which is prearranged prior to the signing of the policy contract. There is a waiting period of 30 – 90 days. A few insurance companies require a 30-day uninterrupted redundancy prior to paying the insured while others will pay the insured after meeting the 60 – 90 days requirement following an accident or illness. This is stipulated on the terms and conditions of the policy and is influenced by your premium and the coverage that you take. You need to verify though if it was antedated to the first day. A few insurance companies do this while there are some who do not. You are assured of having an income for between 12 and 24 months after the policy starts, which is usually more than enough to give you time to look for another job or get back to work.
It would be wise to get a Mortgage Payment Protection Insurance that includes a Loan Protection Policy. It is offered as an add-on product, which becomes a “perk” for the insured. This has actually attracted more insurance buyers, as having plenty of insurance can also be confusing.
It is always better to plan ahead instead of waiting for the worst to happen. Job loss can happen at the time that you least expect it and getting a mortgage protection cover as soon as you purchase your home will save you from such a dilemma. Incorporating loan protection insurance with the mortgage payment protection is likewise a good choice as this allows you to meet not only your home monthly repayments but also your other financial obligations.
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