Job loss can happen at the most unexpected of times. It can be especially stressful for homeowners with a mortgage. If you ever find yourself in a tight spot after being laid off or fired, mortgage unemployment insurance (MUI) may be able to give you some extra breathing room.
What is MUI?
MUI (sometimes called “job loss mortgage insurance”) is a type of optional insurance which can help cover your mortgage payments if you lose your job. Its purpose is to ward off foreclosure for a time, giving you some peace of mind while you look at other employment options.
If you already have MUI, it is important to understand that opting-in for coverage does not guarantee that you will be covered in the event of job loss. In order for your claim to be approved, there are certain criteria that need to be met first. Continue reading for a few factors to consider.
Depending on your policy, your eligibility for assistance may depend on your age (for example, if you are under 18 years old) or if you are self-employed, retired, or military personnel. Ask your insurer if you qualify to receive assistance.
Type of Job Loss
You may be required to submit documentation that shows how or why your employment was terminated. MUI coverage is most often reserved for those who have been fired or laid off involuntarily. Assistance is less likely to be provided if you willingly quit or were fired as a result of misconduct.
MUI comes with limitations. These limitations can vary from policy to policy. For example, some policies may cover you up to a certain number of months, a certain dollar amount, or whichever of those two limits is met first. Although some MUI policies will cover the entire amount of your mortgage payments, others will only pay a portion. For instance, one policy might cover up to $300 per payment while another covers up to $1,000.
Speak with Your Insurer
This article has touched on just a few basic points of MUI. Policies can vary substantially from one another. Check with your insurer for more information on your specific coverage.