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While many people are familiar with disability insurance that pays for the mortgage, many people do not know about unemployment mortgage insurance. This type of coverage is specifically designed to cover your mortgage payment if you are laid off at your job. If you are worried about potentially losing your job at some point in the future, this can be a vital type of insurance coverage for you to purchase. Here are the basics of how to choose unemployment mortgage insurance.
When you are looking at the different companies that provide this type of insurance coverage, you are going to want to make sure that you look at the rates that are available. Every insurance company is going to have different rates on their policies, and you want to get the best deal that you can. Insurance companies are going to factor in many different variables when they are quoting you a policy. Shop around and try to get the lowest rate that is quoted.
Amount of Payments
When you are shopping around, you are going to want to ask insurers how many monthly payments they will make if you are laid off. Most of them are going to have a maximum number of payments that they will pay for you if you lose your job. For example, they might be willing to pay six months out of a given year if you are laid off. Some might pay for only three or four months. Therefore, you need to make sure that you understand how the policy works before signing up for it.
Many of these insurance providers are also going to have a maximum monthly mortgage payment that they will make. Depending on how big your mortgage payment is, you may not be able to get the full payment made. This could result in only a partial payment for your situation. For example, if you have a mortgage payment that is $3500, you may find a policy that is willing to pay only $2000 a month.
Even though these policies are designed to pay if you lose your job, some of them also have a disability component tied in. If you are disabled, there is a good chance that you will not be able to work. Because of that, your policy might still give you a mortgage payment in this case. You need to check with the insurance agent to see exactly whether disability is covered or if you would have to purchase a separate policy to cover this.
You might also want to check to see if your policy covers loss of wages during a strike. You may not be able to control whether you go on strike, so having this type of coverage can be very beneficial in that case.
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