What if's on mortgage insurance

Archeron

hi all,
A ridiculously over general question here, but I'd like to hear what ye think if possible.

When a person takes out a mortgage, I know there is always life assurance built into the overall payment. I'm wondering if, generally speaking, there is usually any other type of insurance as well?

Basically, a friend of mine has had some medical trouble come out of the blue, and it is going to affect what he can and cannot do for a living. His current job is certainly a no-go and he will have to give it up immediately.
In the meantime, he wont have an income, so usually, does insurance on a mortgage cover for this type of thing as well? Is there a possibility that if he ends up on disability, do the government help with mortgage payments, or is it possible he could lose his house?

I understand that its down to the specifics of the policy and all that, but I was wondering if, generally speaking, most times this type of thing would be covered by insurance, or if the government would help?
Any advice is welcome.
Thanks

The_Conductor

As you inferred yourself- it depends on the policy.
Your friend should get out a copy of the policy and go through it in detail. In some cases there is no illness cover (e.g. I suffered from a pre-existing medical condition when I was getting my mortgage assurance- so the only cover I was offered was a Life policy- that is, if I die, they will pay off my mortgage- but if I am long-term ill, its up to me to manage it).

Get your friends policy and go through it in detail with him. There is not a simple answer to your query- as policies do differ from company to company, and then from individual to individual.

Note: Life assurance is not automatically built into the mortgage payment- in most cases it is a seperate distinct payment- if your friend checks his bank statement he will see it coming out seperately. In most cases the Assurance companies are related to the mortgage lenders- but you are under no obligation to go with a particular Life Assurance company regardless of who the mortgage is held by....

Archeron

thanks smccarrick. I'll see if he can dig out the policy and give it a good thorough reading. Heres hoping theres some cover anyway.

loyatemu

mortgage providers generally require that you take out life insurance before they'll give you a mortgage (and they usually try to sell you a policy themselves). This only repays the mortgage in the event that you or your partner dies.

Long-term illness cover is an option that most insurance companies do provide, but as its not generally required to get a mortgage, most people don't avail of it (its also a good bit more expensive than life cover).

Lex Luthor

Thje life insurance typicall covers death...but if his recent illness is one that could shorten his life span, then it would affect his premium

The_Conductor

Lex Luthor wrote:

Thje life insurance typicall covers death...but if his recent illness is one that could shorten his life span, then it would affect his premium

Very true, I have a loading on my policy