Mortgage Protection Insurance Explained
Mortgage protection policies are designed to provide a specific benefit to pay off the remaining mortgage balance in the event of an eligible event such as death, disability, involuntary job loss, or critical illness.
Some additional features that may be included in a mortgage protection policy include:
- Waiver of premium: A waiver of premium provision may be included in the policy that waives the policyholder’s obligation to pay premiums if they become disabled and are unable to work.
- Inflation protection: Inflation protection may be included to ensure that the coverage amount keeps pace with inflation and the rising cost of living over time.
- Refund of premiums: Some policies may offer a refund of premiums if the policyholder does not experience an eligible event before the end of the coverage term.
- Joint coverage: Joint coverage may be available for couples or co-borrowers who want to protect both individuals in the event of an eligible event.
- Guaranteed renewal: Some policies may offer guaranteed renewal, which allows the policyholder to renew coverage at the end of the coverage term without having to go through underwriting again..
- Conversion option: Some policies may include a conversion option, which allows the policyholder to convert their mortgage protection policy into a permanent life insurance policy at a later date.
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