In the past few years there have been a lot of news stories involving unemployment insurance. If you, personally, haven’t had need for it, there is probably someone in your family who did. Have you ever heard of job loss insurance? It’s quite different from unemployment insurance, and it has something to do with your mortgage.
Unemployment insurance is something that a person may, or may not, qualify for after she loses her job. The specific details that one must meet in order to qualify for unemployment insurance will differ from one state to the next. In general, you have to have been laid off, let go, or terminated from your job for no fault of your own. In other words, you cannot decide to quit your job, in favor of picking up unemployment benefits as a replacement.
You have to go and apply for unemployment insurance benefits. It does not come automatically to you when you lose your job. Once you are approved, the amount you will receive depends largely on how much money you were making before you became unemployed. You are usually expected to continue to look for work while you are receiving unemployment benefits. There are a lot of people who probably should be getting unemployment benefits but who cannot because they have been unemployed for too long, or due to financial difficulties that their state experienced in regards to trying to fund unemployment insurance benefits.
Job loss insurance is something completely different. While unemployment insurance comes from the federal government, job loss insurance comes from a bank. It is something relatively new that is being marketed to consumers who are interested in buying a mortgage from a bank who is a lender of mortgages. You can think of job loss insurance as an extra protection in case you wind up in the unfortunate situation so many Americans ended up experiencing in the past few years. If you purchase a mortgage, and then lose your job, the job loss insurance kicks in, so you won’t lose your home.
It is usually offered to the consumer at no cost to them when they are approved for a mortgage. If you lose your job, the job loss insurance will pay your mortgage payments for you, for a while. In some cases, it could last six months, for people who lost their jobs in the first year or two after getting a mortgage.
The total amount of coverage usually comes with a cap, and it will not pay more than that set amount, even if your mortgage is higher than it. Often, a cap ranges between $2,000 to $2,500 a month. Potentially, some job loss insurance can cover property taxes, interest payments, payments on the principal of the mortgage, and even hazard insurance.
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