What is mortgage protection

How do I enjoy the benefits offered?

The insurer will either give the policy holder a lump sum payment to settle his mortgage or he will directly give the lender the lump sum amount. The lender in this context is the person or company that has provided the mortgage to the policy holder. The amount given to either the policy holder or the lender will depend on the severity of the policy holder’s situation and type of cover purchased.

If the policy holder has purchased a plan that includes Total permanent disability and term life cover then the mortgage repayments will be made on his behalf when the policy holder is disabled or passes away.

If the policy holder has purchased a plan that include Total permanent disability, term life cover and income cover then the mortgage repayments will be made on his behalf when the policy holder is disabled, passes away or loses his job due to reasons beyond his control.


What are the eligibility criteria for mortgage protection plans?

These plans are offered to people who are between the ages of 20 – 59 years. The person interested to buy a plan must have a current home in a residential area and should use this home either for living or as investment.

Commercial property may not be covered by standard mortgage insurance plans. Some insurers may only offer mortgage plans to those people who have refinanced their mortgage in the last 90 days; while other insurers may offer these plans to people at any time provided that their mortgage is still valid. Mortgage plans are valid until the term of the contract is valid, which can be 5 years – until the mortgage is valid with the lender.

In addition, to these criteria, insurers require that the policy holder pays the premiums towards the mortgage plan in full when he files a claim; this means that all premiums due till date should be paid before a claim is filed. If the policy holder has missed one or more premium payments then he may not be eligible to get the benefits offered.

 What is the purpose of mortgage protection plans?

Mortgage plans have one main purpose that is to help families repay mortgages when the main bead winner of the family is disabled, ill, has lost his job due to reasons beyond his control or has passed away. These plans offer financial security to families that live on their income and do not have funds stored away for a rainy day.

Mortgage plans offer peace of mind to families with young children, elderly parents, an unemployed partner, pets and other dependants. These plans can ensure that families do not lose their home when the main bread winner of the family cannot earn a steady income either for a limited time or indefinitely.

 3 Things you should know about mortgage protection plans

  • Mortgage protection plans include TPD, Term life covers, income protection covers and trauma covers but do not offer the benefits of these covers. This means that, if the policy holder is affected by any of the conditions offered by these covers then he will get financial help to repay his mortgage; however he will not get financial help to pay for household costs or school fees and other expenses.
  • Mortgage protection plans are a must for all individuals and families with homes. Such plans ensure that families do not lose their homes and do not have to move out of the home their built with love when the main bread winner cannot earn a steady income. These plans prevent young children from facing trauma when their families are evicted from the home they know to be their safe place. Such plans can prevent elderly parents or grandparents from having to fend for themselves at an old age when they are asked to leave their home due to financial constraints. These plans can also help investors if they own a home in a residential area and meet the eligibility criteria. Depending on the plan you purchase, you may also be eligible to get one or more perks from the insurer; but this will depend solely on the discretion of the insurer.
  • If you are interested in getting maximum protection against loss of income or want financial help when you are disabled then you should consider purchasing income protection plans for loss of income and Total Permanent Disability plans for disability. Purchasing these plans along with mortgage plans will help you get maximum financial benefits when you file a successful claim. Term life covers purchased separately or along with mortgage plans will help your family remain financially stable even when you are not there to help them out. Purchasing multiple plans from the same insurer or from the same insurance comparison website can help you save a significant amount of money while getting insurance plans that are ideal for your needs. Comparing a few plans before making a final purchase can help you find an insurance plan that is ideal for you and your family’s needs. Remember, personal insurance plans and mortgage insurance plans are not mandated by the law; however these plans can help you and your family live a happy and financially secure life even when you are facing financial problems.


  Income Protection Life Insurance