Mortgage protection Faqs

Why Purchase Mortgage Protection?

  • Mortgage plans protect families who have homes that they either use as their primary home or have purchased as an investment.
  • These plans offer financial protection to people between the ages of 21 – 59 years who have purchased a home in a residential area.
  • These plans ensure that the policy holder and his family do not have to leave their homes if the policy holder is unable to earn income either for a limited time or indefinitely.

Who Should Purchase Mortgage Protection?

  • Mortgage plans should be purchased by individuals or families that have mortgages and need help repaying these mortgages if in case they are unable to do so themselves due to disability or death and a few other scenarios.
  • Mortgage plans should be purchased by families who have young children and do not want their children to suffer any trauma due to witnessing their families being evicted from their homes due to financial constraints.
  • Mortgage plans should be purchased by families who have elderly parents in the family structure and want to ensure that the elderly parents or grandparents are well taken care of for the rest of their lives.
  • These plans can also benefit families with pets especially if the family loves their pets and doesn’t want to lose their pets who they consider as family members.
  • These plans are meant for families who want to protect one another from financial upsets and want to ensure that no one in the family has to worry about money problems if in case the primary bread winner loses the ability to earn income due to any reason.


Why Purchase a Mortgage Protection Plan with Maximum Cover?

  • Basic mortgage plans offer protection against situations such as disability and death. In such scenarios, the insurer will pay a limited mortgage settlement amount to the lender and the policy holder will have to manage to pay the remaining amount later on. Basic plans may have limitations along with restrictions and exclusions hence; buyers who opt for such mortgage plans should read the product disclosure statement and ensure that the policy they are purchasing is ideal for their needs.
  • Comprehensive plans offer protection against situations such as disability, critical illnesses, death and involuntary loss of income. In such scenarios, the policy holder will get financial help from the insurer, and the insurer will either pay part of the remaining mortgage amount to the lender or will settle the mortgage once and for all. Comprehensive plans offer maximum protection in many scenarios and ensure that the policy holder gets maximum benefits. Comprehensive plans are flexible, allow the policy holder to be in control of not only his policy but also his life and ensure that the policy holder gets maximum benefits when he has to file a claim.


Why Not Purchase an Income Protection or TPD Plan Instead?

  • Income protection plans pay a monthly payout to those policy holders who cannot earn a steady income due to illness or injury. While these monthly payouts can be used to pay for mortgage repayments; usually families with young children or elderly parents need more than just income insurance plans to survive when things get tough for the family.
  • Total Permanent Disability Plans pay a lump sum payment to the policy holder when he is critically injured, cannot use his limbs, loses function of his eyes or loses his eyes and limbs in an accident. While the compensation payout given to policy holders for TPD plans can be used to make mortgage repayments, this amount is usually given to policy holders to help them stabilize their lives, make adjustments to their home and survive without taking loans until they adjust to their new reality.
  • Critical illness or trauma illness plans pay one lump sum payment to the policy holder if he is diagnosed with a serious illness that he may not recover from. Patients who may not be able to fight the battle against the illness, can use these funds to keep themselves comfortable or pay off other debts; provided they have a mortgage repayment plan to help them with the remaining mortgage repayments they have to make. An additional, compensation payment of $10,000 – $50,000 may be given to policy holders who are either diagnosed with a critical illness or have survived a critical illness such as cancer.
  • Mortgage repayment plans offer a lump sum payment to either the policy holder or the lender from whom the mortgage has been taken. This lump sum payment makes it possible for families with other insurance plans or other resources to survive without being burdened by mortgage repayments.


What are the Differences Between Mortgage Protection and Term Life Insurance?

  • Term Life Insurance plans offer one lump sum compensation payment to the family of the person who had purchased the policy. These plans allow the family to use the money as per their requirements after the claim has been approved. While this money can be used to repay mortgages, this amount can also be used for other things such as but not limited to paying school fees for children and keeping money aside for a college fund.
  • Mortgage repayment protection plans offer financial relief to the family of the policy holder by settling his mortgage in full when he passes away due to an accident, an illness or due to natural causes. This type of repayment plan ensures that the family is not burdened by mortgage repayments when they are already grieving the loss of a loved one.


What are the Limitations of Mortgage Repayment Plans?

  • Mortgage protection plans do not offer financial relief to those families of policy holders who have committed suicide.
  • These plans do not have any other major limitations; however policy holders are advised to read the terms of the plan carefully before agreeing to purchase plans; especially if the policy holder is planning to purchase a low cost budget plan with limitations, exclusions, restrictions or premium loading fees.





  Income Protection Life Insurance