Mortgage protection insurance isn’t something that’s easy to understand.  The overall process might be straightforward but there’s a number of common misconceptions.

First of all, mortgage protection insurance is an extension of life insurance.  The way it works is this:  you take a physical exam, a doctor determines how healthy you are, and it affects the premium you pay to protect your house.

Mortgage protection insurance essentially allows your loved ones to keep your house in the event of untimely death.  If you’re still working into your 60s, then such a form of insurance would be a prudent option.  If you’re younger, it’s not like it’s going to be entirely wasted, but it simply plays the same role as life insurance—you pay a smaller premium since you have lower odds of facing death.

This kind of insurance also is frequently scammed on the internet.  Possibly because it’s key demographic is elderly people who inherently aren’t quite as familiar with the online world, it’s a commonly faked process on the internet, and sites like Rip Off Report have frequent postings regarding related scams.

With this in mind, the best place to get mortgage protection insurance is through an insurance provider you already have.  If you already have homeowner’s insurance through a specific company, that would be an ideal source from which to acquire mortgage protection insurance.  Furthermore, it’s possible that even your health care provider will offer some kind of similar insurance.

Commonly, these policies run up to about $400,000 but you likely aren’t going to need that much coverage.  If you can find a trustworthy provider, you’re only going to need to insure the excess amount on your home so that if you’re unable to work any longer and make a decent income (or any income) your expenses will still be covered.

Similarly, in the US the government offers disability benefits as a part of social security.  These benefits come out of taxes year after year, and you even had to pay them over time.  Depending on how much you’ve worked in your lifetime, you might be eligible for decent disability benefits.

Generally speaking, these benefits aren’t very strong.  They offer you a fixed monthly check that’s based on your work and tax history.  If you’ve worked longer and paid more taxes, you’re eligible for a larger amount of money per month.

These checks usually won’t cover the full price of a mortgage payment but it will at least bring you fairly close.  All other bills aren’t accounted for, of course.  And that’s why it might be necessary to purchase supplemental insurance, such as mortgage protection insurance.

Your premium, or monthly fee, will be based on how likely they asses you to be to die or otherwise become impaired.  In the event that such a thing happens, your surviving family (or you, if you’re simply disabled) will receive monthly checks based on whatever policy you’ve agreed upon.

This can alleviate the stress of finding a way to pay hefty bills when something unexpected happens.  But as mentioned, stay away from the internet scams.

For example, most mortgage protection insurance is centered on death and disability.  But on the internet it’s become increasing popular to offer insurance that protects against unemployment.  Likely with the amount of unemployment that the country has seen in the past few years, this has become highly in demand.

Before diving in, evaluate the source from which you’re getting this particular kind of insurance.  And stick with name-brand providers, possibly even household names.

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