Regardless of how careful you try to be, life is full of the unexpected. That is why mortgage protection and life insurance is all about the certainty of planning for the uncertain. It's not uncommon for life insurance to also be referred to as mortgage protection insurance, since most people equate buying life insurance with the need to pay off large debts. Both forms of insurance are created for the protection of your family and/or dependents and both provide peace of mind for you, knowing that their lifestyle can continue without additional difficulties. While the coverage is similar, there are some differences in the design of these life Insurance programs as well as how they should be used.

Mortgage Protection is a specialty type of life insurance usually offered to consumers who have recently purchased or refinanced a home mortgage, generally within the last 12-18 months.  Various life events will typically create the necessity for this type of product and since a home is one of the largest investments most families will ever make, carriers have created forms of life insurance designed to cover those needs most relevant to homeownership.  Please, do not confuse this with primary mortgage insurance (PMI) which is placed by a lender to protect them in the event that you default on your loan.  This mortgage protection is much different and is for the benefit of you and your loved ones.

Mortgage Protection is a simplified issue life insurance policy in which insurance carriers offer an expedited underwriting process that does not require a medical exam and is considered non medical life insurance. The death benefits are payable up to 125% of the mortgage balance or a maximum of $250,000. Typically, all that is required is a few medical history questions and, in some instances, a blood and vitals check in your own home by a registered nurse. Mortgage Protection is an easy and affordable solution for young, healthy families and those who have minor health issues that are managed by oral medication.  Even casual tobacco users can benefit from such an option since under most circumstances they could be charged more for fully underwritten products.

Interestingly, these policies can offer many additional rider options, some of which are specific to the mortgage.  One such option is a Mortgage Payment Rider which will pay all or part of your mortgage payment for up to 24 months after a 90 day waiting period if you are injured or seriously ill and unable to pay. The most popular rider is the Return of Premium Rider which is a living benefit that repays you the entire total of premium you have paid over the term of the policy. Considering that most term policies run 15, 20, or 30 years like the mortgage, a return of $30,000 is not uncommon and is also an effective tool for paying off or down on the mortgage principal balance or to purchase an insurance product by paying in full.

Straight Term Life Insurance is the least expensive type of coverage and provides protection for those value minded consumers for periods of 10-30 years. Straight Term Life can provide the most coverage with a guaranteed premium for the length of the term. While these polices can be more affordable for very healthy consumers, more in depth medical underwriting will be required for polices over $250,000. Also, individuals will fall into specific premium risk classes based on age and health status, which may be beneficial for older healthy individuals and those who need higher amounts of coverage.

Lawmakers are scrambling to work out the kinks in the Financial Stimulus Plan one of the plans focus has been on consumer healthcare cost and ways to insure healthcare for families in this economic crisis. Recent reports say all the details are not yet known as the house and senate work to finalize the plan, but the outcome should be good and released as soon as the end of the week. The purpose of the COBRA subsidy is to help many Americans who are losing employment maintain coverage. The plan will provide as much as 21.4 billion in COBRA healthcare subsidies.

What does this mean for you? If your recently lost your job and are unable to secure new employment you will most likely be or unwilling to accept COBRA to maintain your personal or family employment coverage the government will subsidize somewhere between 50-65% of the premium, the length of the subsidy plan will run from 9 months to as long as 18 months. However single filers and married filers will lose eligibility at incomes over $125,000 and $250,000 respectively. Also of worthy research is what many A rated health carriers have designed for this purpose is temporary health insurance or also known as short term medical coverage.

Most tobacco users are the first to put off purchasing life insurance because they anticipate the rates being out of reach. Insurance companies do consider a smoker to be a higher risk to cancer, respiratory problems, high blood pressure, missed work and death and will rate the insured at standard the majority of the time. Approximately 90% of the carriers we reviewed required 3 to 5 years smoke free to qualify for the best rates of preferred and preferred plus rates.

 One interesting fact is that some Insurance carriers distinguish between cigarette smokers and those you use tobacco products such as pipes, cigars, chewing tobacco, nicorette gum and nicorette patches as many of these users can still qualify for non tobacco rates with a few select carriers if otherwise medically qualified. Typically an occasional celebratory cigar user 1-2 per month can still qualify for preferred rates. Tobacco usage has always been a risk factor in the underwriting of life insurance. However, based on current information, the true occasional cigar smoker has shown little if any true excess mortality.

 The recent changes in the economy have created a large consumer base without employer health coverage and as anyone knows unexpected illnesses and accidents can happen at any time. Consumers in transitional periods have the greatest need for short term medical insurance. Any unexpected illness, accident, or injury could deplete all of a family's savings, even lead to financial disaster. Short term medical insurance can be a short term solution.

What is Short Term Medical?

Short Term Medical is a form of health insurance that is typically used for covering gaps on permanent health insurance coverage. Short Term Medical Term periods are usually for 1,3 or 6 months and some STM plans cover up to 12 months. Short term medical insurance is a great way to protect you or your family members when you may find yourself in any of the following circumstances.
Between Jobs- If you have been laid off due to recent economic changes or are simply between employers and have a waiting period for employer benefits you can purchase instant coverage short term medical for about ½ the cost of COBRA. Additionally if you have medical issues pre-exisitng condiitons or are currenty being treated  and attempt to qualify for individual coverage between employers you could be declined. Short term medical will not decline you if you have or had creditable coverage requirements.

Temporary or Seasonal Employee- Short Term medical may be suitable protection to maintain health insurance coverage for those who have changing employers