FAQ
Who Qualifies for Unemployment Mortgage Protection Insurance?
Qualifying for this type of coverage is usually open to most people who currently have a fulltime job that provides a W2 to the IRS. The coverage is not available to seasonal workers, self employed, entrepeneurs, or part time employees.
How much will this coverage cost?
There are differences in premiums based on several factors including age, job tenure, health, employment history, and several mortgage related factors including remaining balance. The insurance company wants to assess the risk factors that could place you in need of coverage.
What limitations are there for paying out if I lose my job?
This policy will typically not pay out for a few reasons. If you voluntarily leave your job or are fired for cause, you will not receive benefits. In addition, anyone who is involved in seasonal work or a profession that has normal gaps in employment are not eligible.
How long will the coverage last?
The coverage will cover up to 6 months of unemployment. When you find a new job, it will also provide a partial payment for the portion of the month you did not work when you start your new job. In addition, the policy will cover subsequent unemployment periods as long as you hold a job for 4 months.
Supplemental Mortgage Unemployment Insurance
Supplemental Mortgage Unemployment Insurance
Most people are aware that the government will pay unemployment benefits to US citizens who lose their jobs. The amount of the benefit is directly tied to several factors including:
- State of Residence
- Hourly pay rate of your most recent job
- Number of dependent children
There are multiple calculators available on the internet that will assist you in determining the exact amount available to you should you lose your job.
Government Benefits May Fall Short
While these benefits can be vital to maintaining your lifestyle, they are in most cases well short of the full compensation lost. This gap in salary can cause financial strain and it is prudent to research your exact benefit and determine if that would be adequate to cover your expenses in the event of job loss.
Most financial advisors will recommend having 3 to 6 months of living expenses set aside in case of job loss, illness, or injury. This is a wise goal but for many people, this would take years to accumulate. In the interim, it may be advisable to research a supplemental insurance policy aimed at closing the gap between the government’s benefits and the real expenses you will face each month.
By adding a policy like this to your portfolio, you would be buffering your family from the financial hit coming from a job loss. The coverage can last for up to 6 months which will allow time to locate a new job and get back on your feet.
Mortgage Protection
Mortgage Protection
Hope for the Best
During trying economic times, many people become more conservative and hold off on spending while they try to firm up their financial position. We want to hope that things will improve but it is only prudent to prepare your family for harsher times to insure the stability of your day to day life.
Most people believe that bad economic cycles, however dramatic, will eventually turn positive. Financial advisors try to smooth out the peaks and valleys of these cycles and provide a more stable life for their clients.
Plan for the Worst
Mortgage protection is one piece of this plan. Insuring a consistent living situation while being out of work will allow you to focus on more important tasks such as
- Improving Interview Skills
- Taking Professional Training
- Updating a Resume
- Education for a new Career
All of these activities require attention and focus which can be difficult if financial stress interferes. Researching all financial options while you are still employed is the best time to prepare. As with other forms of insurance, it is impossible to get a mortgage protection policy if you already need one.