Your Mortgage Protection Insurance Guide

Mortgage Protection Unemployment Insurance

Mortgage protection unemployment insurance is a type of policy designed to protect families and their homes when homeowners lose jobs. Most families require two incomes to get by, and mortgage payments are usually their largest monthly expenses. If you’ve lost a job, you might have trouble keeping up with payments even if your spouse is still working.

There’s an important caveat to make here. You may think that if you have a mortgage protection unemployment policy in place, you won’t have to worry about what will happen if you or your spouse lose a job, especially if you heard of this type of policy after reading a letter in the mail from a local mortgage protection insurance agent. In truth, there are no policies that cover mortgage payments during periods of unemployment.


Can Your Mortgage Protection Insurance Help You Pay the Mortgage If You’re Unemployed?

It’s important to read the fine print before signing up for a new mortgage protection insurance policy. Many policies state that they will offer to waive mortgage protection life insurance premiums for up to six months. That doesn’t mean the policy will cover payments on the mortgage.

The purpose of mortgage protection unemployment insurance clauses is to make sure that homeowners who lose their jobs can keep their mortgage protection insurance coverage in place. It isn’t to help them keep up with mortgage payments.


Read the Fine Print

The letters that come in the mail from insurance agents are often intentionally misleading, so read them carefully. They may have a clause about unemployment that says premium payments will be covered. Premium payments are for the policy, not your mortgage.


Why Is the Fine Print So Important?

Homeowners who believe their insurance policies will cover mortgage payments during periods of unemployment can get themselves into a lot of trouble. It’s not just that unemployment clauses don’t cover mortgage payments. In many cases, they don’t kick in until you’ve been making payments on your plan for two years or longer.
Why Don’t Insurance Companies Offer Real Mortgage Protection Unemployment Coverage?

Homeowners can become unemployed in many ways. Some get laid off as businesses downsize, while others are incompetent at their jobs, or even engage in theft, fraud, or another criminal act.

While good, hard-working Americans lose jobs every day and they deserve financial protections, there are even more people out there with bad work ethics who would take advantage of these kinds of provisions. Most mortgage insurance companies would love to offer unemployment protection. They just haven’t found a way to differentiate between good, hardworking Americans and scammers.


What Are My Options for Unemployment Insurance Under Mortgage Protection Plans?

You only have one option. You can choose a company that will waive your monthly premiums for up to six months if you become unemployed.


Other Suggestions for Making Payments While Unemployed

We can’t help you find mortgage protection insurance that covers unemployment, but we can offer a few tips for how to deal with this problem. The most important thing is to keep your mortgage payments low, then put any extra money you have as a result into an emergency fund that could be used to continue paying monthly bills during periods of unemployment.

Most families are just a paycheck or two away from losing their homes. Living below your means, maintaining a strong emergency savings account, and having a solid financial plan in place can make weathering periods of unemployment less stressful.


What If My Insurance Agent Told Me I Would Be Covered?

Read your contract. Only what’s written in this document is actually valid, so it doesn’t matter what the agent said. Some insurance agents are so desperate for commissions that they will intentionally mislead homeowners, so be on the lookout for deceptive sales tricks.


What Should I Do if I Was Misled?

The first thing to do is to read the fine print and see what your contract actually says. If you’re not up on your legalese, reach out to us. We enjoy reviewing homeowners’ mortgage protection policies, and we already know most of the details that will be included.


Are Unemployment Provisions Worth Keeping?

If you already have a mortgage protection insurance plan with an unemployment contingency and you understand that it will only cover monthly premiums, you may want to keep it. If, on the other hand, you accidentally signed up for the plan thinking that it meant something else, it may be time to switch to a different one. We can help you find a company that offers the same benefits at lower rates.


Is Mortgage Protection Insurance Worth It on a Tight Budget?

Families that are struggling financially often cut their mortgage protection insurance coverage. Unfortunately, if the household earner dies, that means the rest of the family will lose the home. Mortgage protection insurance doesn’t have to be expensive, so reach out to us to learn how you can protect your mortgage for just a dollar or two a day.