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When you have invested so much into purchasing your home, you should be aware of the variety of insurance products available for mortgage protection. Only building and content insurance coverage is compulsory upon receiving a mortgage. However there are several other types of insurance available to protect your home in case an unexpected event prevents you from making your mortgage payments.
The most widely utilized mortgage protection insurance is currently the critical illness policy. This product will ensure that should you fall victim to a serious illness you would be issued one tax free lump sum payment upon your diagnosis that can be used to pay off your mortgage. These are usually conditions such as cancer or a heart attack, but your policy will dictate they consider a serious illness.
There is also the mortgage life insurance policy that will cover your mortgage debt in the unfortunate event of death. Life cover policies can adjust the rate of coverage as the balance due on your mortgage in reduced by monthly payments the coverage amount will reduce as well. There is also the option of a level life cover which is usually a bit more expensive however your level of coverage remains the same regardless of your mortgage balance.
Accident, sickness and unemployment insurance is exactly as it sounds. In the event that you should have an accident, become too ill to work or become involuntarily unemployed your mortgage will be paid. It is important to keep in mind when choosing this insurance that it will only pay out for up to two years so the benefits may run out prior to your mortgage being paid regardless of if your situation with health or employment has changed.
Finally there is income protection coverage. This type of policy will offer protection should you become sick or disabled for an extended period of time. Permanent income protection insurance will continue to pay monthly benefits until either you may return to work, or when your policy expires, which is generally once the mortgage has been paid in full.
The purchase of a home is the most significant purchase that most of us will ever make. It is just as important that you protect your family from unforeseen circumstances that could jeopardize the security of your home. There are a number of products available to assure that you can rest easy knowing you are protected.