Even before I get into the debate on mortgage insurance, let me make it clear that mortgage insurance is different from Private Mortgage Insurance or PMI, as it is popularly known. Unlike mortgage insurance, PMI isn’t a choice, but a necessity for borrowers who cannot afford to pay the requisite 20% of the value of the house as down payment. This is geared to help the lender (and not the borrower). Thus, it’s of no concern to the borrower.

However, mortgage insurance is a matter of choice for borrowers; where glib talking salesmen manage to convince people into securing their family against unforeseen circumstances. But to decide if this is indeed required, depends on individual situations. For instance, if you aren’t really sure about the job market in your industry, or worried about your health, this insurance does make sense.

But if you’ve secured the future of your family, the money spent on these premiums is best invested elsewhere. In the event of your death, your family would be better off paying the loan amount, thanks to the money spent on those investments. Securing the house, wouldn’t be enough, because they would still need to replace your income to continue with their lives.

Besides death and redundancy, this insurance also protects you if cannot continue to work due to a long-term illness or accident.

But make sure to read the fine print before you opt for mortgage insurance. Not all insurance policies are made alike. For those looking to avail benefits from the insurance, the waiting period can be long and frustrating. Most companies require the insurer to wait for about 30 to 180 days. The payment too is covered for a limited period; usually up to 1-2 years. After that, the insurer is left on his own! Some companies do not allow people to take up insurance, when the mortgage plan is changed. There are some companies that increase premiums and reduce cover for existing policy holders.

Of the myriad types of insurance policies available, liability insurance is right up there in popularity, primarily because it is less expensive than other insurance. For instance, when it comes to auto insurance policies, liability insurance costs are distinctly less than full coverage. Full coverage insurance covers for both vehicles involved in the collision, in addition to the medical expenses and property damage due to injuries to you or another party. Liability insurance, on the other hand, is accountable for only the other party’s damages. Though you and your property are not protected under the coverage, liability insurance guards you from being responsible for other people’s losses.

There are various types of liability insurance, including general liability that works in the same way as auto liability insurance, but deals with businesses. General liability covers clients from third-party claims. Liability insurance is intended to offer protection against claims by the third party, i.e., payment is not given to the one insured, but to the person suffering the loss and who is not a party to the insurance. Usually, liability insurance policies do not cover contractual liability or damages that are caused deliberately. When a claim for damages is put forward, the insurance carrier can exercise its right to defend its client. Policy limits do not affect the legal costs.