FREE Insurance Comparison

Call (855) 425-8122

for FREE insurance quotes by phone
Insurance | Free Online Insurance Quotes

Compare Insurance Quotes!

Compare Quotes from Top Companies and Save

Job Protection Insurance

Job protection insurance is a worthy consideration for homeowners. Very few jobs are guaranteed and, when the economy is poor or uncertain, jobs become even less guaranteed. If you are a homeowner, then one of the biggest expenses you have is your mortgage. Losing your job unexpectedly can end up costing you your home unless you have job protection insurance.

Not everyone qualifies for job protection insurance, and not everyone may need it. The basic idea of job protection insurance is to provide you with approximately six months of mortgage payments.

If you can afford to pay six months of mortgage payments while being unemployed and without taking it out of your retirement savings or other “off limits” funds, then you may not need job protection insurance. Also, if you are not the main provider of your income in your household, then job protection insurance may not be beneficial to you.

However, if you are the sole or primary financial provider for your home and/or you do not have an emergency fund that can cover half a year’s worth of mortgage payments, then you should at least consider job protection insurance. The idea is that you can survive temporary unemployment without ending up penniless just to pay your mortgage or, worse yet, left unable to pay your mortgage at all and losing your home due to foreclosure.

The Advantages of Job Protection Insurance

There is more to a mortgage payment than just the principal amount. Your mortgage payment also includes the interest you owe, which can sometimes be higher than the principal amount. Also, most mortgage payments include property taxes and homeowners insurance payments.

Property taxes are usually paid twice a year and homeowners insurance is typically due annually. However, your mortgage lender will divide the annual amount due and prorate it for monthly payments. This is usually beneficial to the homeowner because it keeps the homeowner from having to come up with lump sums of money during the year.

The monthly payments of tax and interest are placed in an escrow account from which your lender pays your bills when they are due. However, if you have a substantial amount of money in your escrow account (such as a few months worth) and you lose your job, you cannot tap into the escrow fund to help pay your other bills or to apply directly to your principal instead.

This means that even if you lose your job you are required to pay the full amount of your mortgage payment, including taxes and interest, despite the fact that those bills are not currently due. If you lose your job then you need to know how you are going to make that full mortgage payment.

Job loss protection is insurance that protects your home in the event the primary homeowner becomes ill or is terminated. Job loss protection then pays your mortgage for a set amount of time, which helps to keep you in your home while you recover or look for another job.

Free Car Insurance Comparison

Compare Quotes From Top Companies and Save

Qualifying for Job Protection Insurance

Most people qualify for job protection insurance provided they pay for their premiums on a timely basis. However, job protection insurance only pays out benefits for certain qualifying factors.

If you are fired or laid off, then you may receive benefits from your job protection insurance. If you qualify for the benefit, then your insurance company may pay out your full mortgage payment every month for however many months you need assistance up to the maximum benefit allowed on your policy.

A lot of job protection insurance policies pay your entire mortgage, which includes your payment, your interest, your property taxes, and your homeowners insurance. Some policies may only pay a certain amount of your mortgage and you are responsible for paying the difference.

In order to qualify for a benefit payout for job protection insurance, you will most likely need to have either been laid off from your job, have been terminated, or have suffered a disability. These types of incidents are usually covered by job protection insurance.

You may not be able to start collecting benefits immediately. In cases where you are laid off you may have to wait a couple of months before your benefits begin.

However, if you quit your job you will not be eligible to collect any benefits from your job protection insurance. You also are not able to buy job protection insurance if you are self-employed.

It is also important to note that in most cases the insurance company will make the benefit payment directly to your mortgage lender and not you. This assures that the money is used to actually pay the mortgage and avoid the possibility of it being spent elsewhere.

Getting Job Protection Insurance

There are different ways to get job protection insurance. One of the easiest ways is to get the insurance through your mortgage lender. However, in order to get the most competitive rates, you may want to use an online insurance rate comparison tool.

The policies may vary by state, so you can also contact your state insurance commissioner to find out what your options are. For example, in California there is a free mortgage protection plan through the Realtor’s Association that provides assistance of up to $1,500 a month for qualifying first time home buyers.

Other programs have also been established by certain realtors, such as Genworth and Prudential. In some instances, home buyers can get job protection insurance for no additional charge or for a nominal fee of $500 at the time of closing.

The benefits for job protection insurance are usually applicable for up to six months. In some cases the amount of the mortgage payment that is covered may be around $1,500 or $1,800, although the benefit will not exceed the actual cost of the total mortgage, including payment, interest, property tax, and homeowners insurance.

When unemployment rates are high and jobs are not necessarily secure, job protection insurance can help you stay in your home while you are looking for a new source of income. Job protection insurance can also help you pay your mortgage if you are temporarily disabled and unable to earn your full income.

Without job protection insurance, you may not be able to afford your mortgage and you can face foreclosure proceedings or be forced to sell your home at a loss. Job protection insurance can pay your mortgage for a limited time when you are at a financial loss.

Compare Insurance Quotes!

Compare Quotes from Top Companies and Save