Insurance to pay mortgage if you get laid off?

 Hi I just got a house and a 30 year mortgage. I've been inundated by
advertisements in the mail from insurance companies looking to sell me
a policy that will pay my mortgage for 6 months if I get fired. This
actually sounds like a good idea to me but I've never heard of these
companies and they sound shady, like they will find some reason no to
pay me if I did get fired. Is this kind of insurance legit? Are there
legit companies selling it? Thanks.

   sinister.genius@gmail.com wrote:


Yes, they are mostly legit.  The real question is if this is a
good deal or not.  Given that they can spend lots of dollars
marketing to you, that gives you a clue that there is a huge
profit margin involved.  That means that you spend lots of
money and get relatively little value.  I'd pass on it.

-john-

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John A. Weeks III           952-432-2708            john@johnweeks.com
Newave Communications                         http://www.johnweeks.com
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 sinister.genius@gmail.com wrote:

Do you realize you can double your payments and pay it off in 12 years
sometimes less?

 On Mon, 27 Nov 2006 18:43:39 -0700, someone wrote:



Not if he's unemployed.

Do you realize that if you pay cash, you have it all paid for the
first day?  But how many people can do that?



Reply to NG only - this e.mail address goes to a kill file.

 sinister.genius@gmail.com writes:


Yeah they're legit by and large.  insurance companies will sell
insurance on damn near anything they can hedge a bet on.  Mortgage
protection insurance is something I'm offered every damn month by my
mortgage company.    For death, I think it's silly -- you have life
insurance for that, and if you don't, whoever owns the house after
you're gone can do the normal thing and sell it to get out from under
the mortgage.  The beneficiary of mortgage insurance is the mortgage
company further reducing their own risk.

As for unemployment inusrance for your mortgage... If you are in a
high risk industry and in danger of being laid off and would be facing
a LONG job search, and th ehousing market is crap, then maybe it'd be
some risk mitigation that'd be worth it to you.  For most folks, the
old standby of having 6 months of salary in the bank is a more
effective use of the $ for the insurance.

Never forget that if it weren't profitable for the insurance company,
it wouldn't be offered, so it's genreally wise to only insure against
things that'd financially ruin you or cause a huge huge impact to your
family.  

On a related note, anyone familiar with foreclosure?  How much slack
do mortgage companies generally give folks to overcome such problems
and get behind on their payments?     i.e. in a real scenario where
you can't make your payments, do mortgage companies rush into
foreclosure, or will they give you several months to get back into a
job situation etc?   I've fortunately never known anyone that's been
through that.



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Todd H.  
http://www.toddh.net/