Your Queries Related To Protection Mortgage?

By Author: Vijay Koragappa Shetty
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What is protection mortgage?

It is as simple as it sounds. Basically, it protects your loan or mortgage payments in times of redundancy, illness, accident etc. You will not lose out on any asset that is pledged against your mortgage.

Is this protection cover meant only for loan protection?

Not really, they will help you make any payments that are due such as loans, credit cards or mortgages etc.

Will you be covered if you are on sick leave and unable to go to work?

No policy will let you have dual income source. This policy is a protective cover only when you have no income due to redundancy. If you have paid sick leave then your employer will be paying you your salary and you can't claim for any compensation from your insurance company.

What happens when you are bed ridden for long?

In case you are bed ridden for a long time and cannot get back to work, then you will be covered till your retirement age only if you have applied for a protective cover till your retirement age say roughly around 50-60 years of age. Ask your agent about this cover and specify the age clearly.

Why ...
... is such a cover required?

If you have to avert the consequences of losing a job, just make sure you have such a protective policy in place. This helps you meet your living expenses, pay up your pending loans and thus help your dependents indirectly. You need not worry about losing your collateral.

It helps you safeguard your monthly income flow, be it accident, illness or a sudden loss of job. Your mortgage payments, rental bills, loan payments, house hold bills, credit card payments, grocery bills etc will be covered by income protection insurance. Obviously the longer you wait the cheaper the monthly premiums will be! Look out for companies offering back to day one cover which will pay you back to day one of your claim once the excess period has passed.

Just shell out a little money every month and try to protect your payments in future. Unemployment Insurance cover, which protects you against sudden redundancy or unemployment is often sold by itself but because of the nature of the risk, commands a much higher premium. Consequently, payment insurance premiums and plans have become a lot cheaper now that independent suppliers have entered the market. Always compare the policies before you apply for one.

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