What is Mortgage Repayment Insurance?

There are few insurance products that are more misunderstood than this one. Before we go into mortgage repayment insurance let's look at a couple of the other similarly named products that can confuse many people. Income protection insurance In the first place you have income protection insurance. This insurance product is one which is suggested to people when they are taking out their home loans on the basis that if you fall ill or are injured then this policy will kick in enabling you to keep your mortgage repayments up to date. It is not strictly a mortgage repayment insurance product, it is a product aimed at maintaining your income over periods of prolonged illness following an accident or major health event, like a heart attack for example. Lenders Mortgage Insurance Secondly, there is lenders mortgage insurance. Once again, this is a product which comes up for discussion when people take out home loans. This is not an insurance product which gives you any protection at all. It is our policy which is taken out by your lender to protect itself against the possibility that you will not be able to pay your loan. Whilst it is true that the customer has to pay this premium, it should be reiterated once more that this is to protect the bank not the customer. Mortgage Repayment Insurance So what is mortgage repayment insurance? Simply put, this is an insurance product which you can specifically take out at any time to protect yourself against those situations where you find yourself unable to make your loan repayments. This can happen as a result of injury or illness which prevents you from maintaining gainful employment and therefore suffering a reduction in income. In these circumstances a mortgage repayment insurance plan can guarantee that your loan repayments are kept up to date.