This is a new breed of insurance that has gained popularity in certain countries like UK. Even in US such insurance is prevalent and known as mortgage insurance. For those who purchase a home with less than twenty percent paid as down payment, usually need to have such an insurance in place before their mortgage application is approved. Such type of insurance ensures payout in case one suffers an untimely death or has a permanent disability.
Benefits of mortgage insurance
With the subprime crisis that hit the US and brought down the world economy in the early millennium, there is no doubt that mortgage insurance is necessary for modern couples who have volatile income and savings and wish to avail of mortgage loans to buy a home. As any superannuation advice would come from a financial advisor Woolloongabba, getting a mortgage insurance might drive up the costs slightly more, but it is a way of not only convincing the bank or any financial institution you are lending from but also protecting your co-purchaser. Such insurance also helps to protect a spouse or partner who becomes co-party to a mortgage from having to handle the additional burden in case the other person is unable to bear the mortgage payments anymore.
Cons to consider
Usually mortgage insurance coverage is given in the event that one dies or develops permanent disability. This often does not happen as much as when one becomes unemployed or develops partial disability. Hence, in such cases a financial advisor will probably advise you to take on a life insurance or disability insurance that often covers payments including mortgage payment or protects from such liabilities. A financial advisor who gives information like asset test for age pension will also be able to advise one as per the right insurance coverage for their mortgage. For instance, if one is above the age of 45 and has poor health conditions, they might end up paying more for disability insurance than what they would pay for mortgage insurance. Again, one’s specific employment condition or opportunities need to be looked at as well as other sources of income before one decides on what insurance coverage to take on.If you are looking at mortgage insurance, it can be confusing to make a choice without the guidance of a financial expert. Hence, it is best to refer to an insurance broker who handles mortgage insurance and similar policies. He or she will be able to point out different nuances of such plans and help you to decide which plan would work well. For more info on asset test for age pension, check this out now!