Types of Insurance to Consider
Prospective homeowners should be aware that they will need to arrange for a variety of insurances when they purchase a property. Many mortgage lenders require borrowers to arrange for life assurance cover (so that their loan is protected in the event of your death), and most buyers also arrange for home insurance and possibly mortgage insurance to cover the possibility that a monthly mortgage payment can not be met. Renters too may want to consider contents cover to protect their possessions. Though you may be able to buy all of these types of insurance from the same vendor, it is usually worthwhile to shop around not just for a good price, but for a policy that truly fits your personal requirements.
Life Assurance CoverLife assurance cover is a type of insurance policy that literally covers an individual's life. That is, the individual and the company contract that in the event of the policy holder's death the company will pay out a certain amount to a named beneficiary. Different policies have different terms, but terminal or critical illnesses may also be covered on this type of policy. What this means for homeowners is that if a mortgage payer were to pass away, there would be money available to pay the mortgage without his or her lost wages. For this reason some mortgage providers require that their customers take out life assurance cover.
Home Insurance"Home insurance" is sometimes used as a catch-all phrase to refer to insurance policies that cover both the structure of the home as well as the possessions contained inside the home. Sometimes these policies will protect homeowners against events such as fires and floods, though they may not so separate policies could be necessary to truly protect the home against all eventualities. The terms and conditions of home insurance policies can vary widely, so be sure that any insurance agent discusses and explains policies until you feel comfortable with your level of understanding.
Mortgage InsuranceMortgage insurance, sometimes also referred to as mortgage payment protection insurance (MPPI) cover, is a policy that a homeowner can take out to help them guard against an inability to make their mortgage payments. Generally these policies protect an individual's payments in the face of unemployment (due to redundancy, sickness, accident, etc.), disability or both. If it is expected that extra mortgage repayments will be made then mortgage insurance policies are sometimes written for slightly less time than the life of the mortgage. A deferral period, such as a 60 or 90 day window in which you may not be able to make a claim, may also be in the terms and conditions of this type of insurance.
Contents CoverContents cover may be appealing not only to renters but to homeowners whose home insurance does not extend to their possessions. This type of cover extends to the contents of one's home, usually against the threat of loss, theft or destruction. Sometimes these policies even extend to cover possessions that have been purchased and were in transit to the home when something untoward occurred.
There are a variety of types of insurance related to the home and mortgage. Life assurance cover, home insurance, mortgage insurance and contents cover are just a few such categories of insurance.