by Sheila Attebury

Created on: September 20, 2008   Last Updated: October 21, 2008

I was still in college when my father passed away. My mother was in her early sixties with no savings, had limited work skills and no employment experience. My father's menial life insurance policy only covered accidental death (Dad died of cancer). So, there I was, faced with the prospect of dropping out of college to get a full time job to support Mom. While pouring through my father's jumble of documents, I came across the mortgage I didn't even know existed. Social security might cover Mom's living expenses, but wouldn't even come close to paying the mortgage. What now?

A miracle. At least it was a miracle to me. Saved by one of the few fortunate bits of planning on my father's part, he had purchased mortgage protection insurance. We went to the bank, signed a few documents and the mortgage was paid in full.
Although no one likes to think about personal tragedy happening to our family, mortgage protection can help ease the financial burden when the worst occurs.

You're thinking, "I'm young, I don't plan on dying any time soon. I'll just wait until I'm old to buy mortgage protection insurance." Okay, fine, you aren't ready to die. I get that. Let's talk about a more likely scenario, job loss. In today's uncertain economy, layoffs are a daily occurrence. I hate to be a downer, but what if it happens to you? Oh, self-employed? Okay, okay, you have an answer for almost everything. What if, on one of your rare days off, you help your brother move into his new apartment and you hurt your back? I've got a million of them too. Any of these unfortunate events could be the beginning of the loss of your home.

Mortgage protection insurance protects the homeowner's family when faced with the possibility of defaulting on the mortgage due to death, illness or unexpected unemployment. Mortgage protection is really family protection.

(Note: Mortgage protection insurance should not be confused with Private Mortgage Insurance (PMI) that is sometimes required by mortgage lenders. Although you pay for the PMI, it protects the lender, not the borrower.)

There are two basic types of mortgage protection insurance policies:

Decreasing Term- With this mortgage protection, the payout decreases concurrent with the principal balance of the loan. The desirability of these policies lies in the low premiums.

Level Term With this mortgage protection the payout remains constant at the original amount of principal throughout the life of the loan. The premiums are generally higher than decreasing

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