Christian Mortgage Payment Insurance
Christian mortgage payment insurance is offered by mortgage providers such as banks, credit unions and mortgage houses to help homeowners who may have trouble paying their house payment during a personal crisis period. A few providers of such plans, humorously called "choke and croak" coverage in financial circles often tout their ability to take the worry out of job loss, at least when circumstances dictate paying the home loan for six months. Of course each plan differs in actual length of coverage and in the coverage details within such a mortgage payment plan. Some plans may cover only unemployment, others may pay only for extended illnesses or disabilities, so costs vary from provider to provider. The benefits of mortgage payment insurance are clearly positive, but are the plans worth the money?
Mortgage payment insurance is usually based on three factors. The first is the amount of the home loan, the second is the age of the homeowner and the third is the use of tobacco. In most cases, the plans do not require a health checkup with a physician. Did you know that God actually invites Christians to put Him to the test to see if He will do as He says He will? "Bring ye all the tithes into the storehouse that there might be meat in mine house and prove me now herewith, saith the Lord of hosts, if I will not open you the windows of heaven and pour you out a blessing, that there shall not be room enough to receive it." (Malachi 3:10)
These kinds of plans are usually broken down into two distinct offerings. The first is often called credit life coverage which will pay off the entire home loan in the event of the homeowner's death. In this case, the surviving spouse can then only have the concern of lesser bills, often covered by the employment income of the survivor. The second type of mortgage payment insurance comes in the form of disability credit coverage which will pay for the home loan payments in the event of a crippling accident that prevents return to one's former line of work. Now both types of coverage appear to be a good thing to have, just like an extended warranty on a car or a three year extra warranty on a television may actually sound reasonable. But every financial expert says to stay away from those warranties because they are a waste of money and so is, frankly, any form of home loan payment coverage because they are very expensive models of what can be purchased more cheaply from life insurance companies and those who dispense disability coverage.
Term life coverage in today's market is cheaper than ever before and if a person is in reasonably good health and below the age of fifty, term life insurance to cover the cost of one's home loan will be a lot less than what the bank wants to sell the loan holder. The bank is not the extender of the life insurance, only the middleman, so included in the price of its mortgage payment insurance is profit for the bank or the loan provider. Ostensibly one might think that the cost of that coverage would be a good deal, but the provider is only offering one company's services for the life coverage, so what kind of a deal is that? Many online services allow the customer to have term life companies bid for a customer's business, substantially reducing the final cost. It is important to remember that term life coverage and not whole life or even a hybrid of the two is being discussed. Whole life, which builds equity over time, is much more expensive than term coverage that has no equity.
The second form of mortgage payment insurance that falls under this general umbrella is home loan disability insurance. This too comes in very expensive packaging when offered by the bank or lending entity. This has been called by financial experts some of the most expensive coverage anyone can buy. Many companies offer long-term disability coverage and the amenities are often better than buying this specialized disability plan. Make no mistake, disability coverage is expensive, no matter who is offering it, but the home loan provider's version is going to be much more costly. Mortgage payment insurance in the form of the bank's offering will probably be crafted to make a full payment on the home loan each month. It will be extremely important to read the fine print on the contract because there may actually be a time limit on the payment schedule. It may only be for a period of months and not indefinitely. Long term disability coverage sold by many companies may offer much longer payment schedules but will pay between fifty and seventy percent of a person's working salary.
The advice is to look elsewhere for term life and disability coverage than that which will be offered by one's mortgage provider. Understand that on the day of closing a homeowner can be highly pressured to buy these preformed mortgage payment insurance packages. If a person has done due diligence ahead of time and has acceptable coverage already in hand, the customer will find it easy to say, "No thanks, I already have that covered." The only thing that will then be lost that day is a hefty bit of cash from the pocket of the bank or loan broker. And that is a good thing for the buyer.
Christian Mortgage Payment ProtectionPurchasing mortgage payment protection can give home owners the added peace of mind of knowing that, should tragedy strike, the family home will not need to be sacrificed. These policies will handle payments on mortgages in the unfortunate event of a policyholder's death or disability. Without sufficient planning, a family home can be lost when a breadwinner is no longer able to provide the income necessary to pay a real estate liability. When a family member becomes ill or impaired, the stresses on a home can be very great. If the burden of a mortgage loan falls upon the remaining breadwinner, those stresses are compounded exponentially. Obtaining mortgage payment protection can rescue families from these heavy burdens and allow them to remain in the home they love. There are other insurance products that can meet this need as well. Basic life insurance can be used to retire the loan in the event of the insured's death. But this approach does not help if a family breadwinner should become permanently or temporarily disabled. Another benefit to these policies is that there can often be lower costs associated with such insurance products when compared to traditional life insurance. The health of the potential policy holder will off course be taken into consideration. Those with poor health habits or of an advanced age will frequently need to pay higher premiums.
There are a variety of different types of policies that come under the umbrella of mortgage payment protection. Some policies will only cover the death of the insured individual. Still others will cover both death and disability. In the event of a serious and debilitating illness, there are policies that will provide funds for house payments. Lastly, there are insurance products that will pay off if an individual become unemployed through no fault of their own. However, in the case of unemployment, some products will only cover the cost of the premium and not mortgage payments, so a potential client should make sure that to understand just how much unemployment coverage is being purchase and how the policy will take effect. Since government unemployment benefits are generally substantially lower than an individual's previous income, these benefits alone do not provide sufficient mortgage payment protection. Policies may zero in on only one of these areas, or may encompass a combination of needs. Riders can also be added to existing insurance that will address these various scenarios. Some insurance products will make payments directly to a creditor rather than the individual in the event of a disability. These payments will continue until the insured individual is able to return to work.
When selecting mortgage payment protection, there are a variety of considerations that a potential policyholder should keep in mind. In general, a consumer should look carefully at any benefits that the individual may already have before purchasing this insurance. For example, if an employer will provide continued payments and benefits during an illness, these policies may be an unnecessary overlap. If extended sick pay and a portion of an employee's salary are available, this may be the only protection that a homeowner will need and money spent on premiums would be wasted. On the other hand, self employed individuals can benefit greatly from this coverage. When a self employed worker becomes ill, the income that they were earning will immediately dry up, which can be devastating for a family. Any time an individual has a substantial amount of money in the bank; these funds can be used to tide a family over until the situation improves. A relatively small amount of debt can also make mortgage payment protection unnecessary. However, since very few families can boast of a nest egg so comfortable or an infinitesimal amount of debt, the need for some kind of asset protection is a practical reality. The ability to count on outside help in times of need can be very comforting. The Bible describes the comfort of calling on God and knowing that He will answer. "I have called upon thee, for thou wilt hear me, O God: incline thine ear unto me, and hear my speech." (Psalm 17:6)
When choosing a mortgage payment protection plan, a wise consumer will always make sure to understand the fine print. Questions should be asked before signing any agreement. When will the benefits of the policy take effect? Will the benefits kick in one month after a claim is filed or longer? Will the benefits date back to the onset of the illness or disability? How long will the payments last? Many policies are limited to a year's worth of monthly payments. Is there a maximum amount of payout? What happens if a homeowner has a fluctuating interest rate and their house payment goes up? Do any preexisting medical condition limitations apply? A reputable insurance agent should be able to explain all the aspects of a given policy to the homeowner's satisfaction.
In addition to these mortgage payment protection policies, there are other programs that offer more limited benefits at a lower price. These programs may be offered in conjunction with the original loan agreement. The option of skipping one or two payments within a single year may be a possibility for many borrowers. A skipped payment will simply be added to the balance of the loan. In some cases, monthly payments will rise accordingly when this option is utilized. However, a Christian lender might charge very high fees to any borrower who chooses to use this feature.