BEST MORTGAGE REPAYMENT INSURANCE
The best mortgage repayment insurance depends on what your needs are. Mortgage repayment insurance is one of the more popular insurance products purchased (aside from home, contents and car insurance) because it provides security in meeting your mortgage repayments in the event of sickness or accident.
There are three sources of mortgage repayment insurance. You can buy it over the counter from a bank, sometimes directly with an insurer or use an adviser who usually can provide more than one option.
HOW DO BENEFITS VARY?
The difference between mortgage repayment insurance products can differ substantially, but these differences only apparent at claim time, but even then, you will never know because you had no comparison. The best process is to make the comparisons before taking the policy out, not during or after the claim.
There are differences between insurers and policies such as, some will pay for up to 2 years while some will pay right up until age 65; some will have built-in benefits that will pay you an additional lump sum payment for some broken bones and some will not.
There can be an array of built-in benefits, and in my experience, these provided more so by a specialist insurer such as from a Life Insurance company.
THIS CAN MAKE ALL THE DIFFERENCE
I wanted to focus on the difference between Total Disability and Partial Disability because this can determine whether you will get any payment at all. A little education here may save a lot of heartaches later.
To qualify for a claim, you usually have to be Totally Disabled first, and if you are not Totally Disabled for the first 14 days, then you may not be eligible to claim your monthly mortgage repayment benefit at all.
The alternative is being Totally Disabled is being Partially Disabled and clarifying what I mean, let’s take a look at the following two examples.
Totally Disabled means that you have to be deemed as not being able to work at all, conversely, Partially Disabled means you can return to work but at a reduced capacity. I am paraphrasing here because policy wording varies from each policy, but you get the idea.
TOTALLY DISABLED EXAMPLE:
Let’s say you were off work due to a sickness or accident and you were not able to return to work at all for eight weeks. In this case, you are Totally Disabled and eligible to claim after your initial wait period.
PARTIALLY DISABLED EXAMPLE:
Let’s say you were off work due to a sickness or accident, but your doctor tells you can work, but only for 20 hours a week. In this case, you are Partially Disabled.
Some insurance policies require you to be Totally Disabled for the first two weeks before any Partially Disabled claim can be considered. If you were partially disabled first and never totally disabled then with some policies, you could not claim at all, even though you are not able to work.
THE GOOD NEWS
Some insurers do not require you to meet the Totally Disabled requirement to be eligible to claim for a Partially Disabled claim.
If you have purchased Mortgage Repayment Insurance online or over the counter, my advice is that if you want to make sure you have the best mortgage repayment insurance for you, please contact us so we can check it to make sure you get what you expect.