Job-loss mortgage insurance is available from a host of sources and policies vary in coverage, cost, benefits and requirements, so you'd better shop around.

Simply put, for policy holders, job-loss mortgage insurance pays your mortgage when you lose your job -- to a point. Typically paid direct to the lender, policy benefits can cover principal, interest, taxes and insurance, if all items are included in the original mortgage payment.

"The job loss insurance is a big help for many mentally, knowing that the help is available if they should lose their jobs. And it gives comfort for some that are sitting on the fence," said Quincy A. Virgilio, Jr. president of the Santa Clara County Association of Realtors.

The coverage can be a good deal if you fear job loss, if you have no other financial back up should your employment end or if you know you later can't refinance or modify your loan out of trouble and don't want to lose your home.

Here are some issues to consider.

• Variations. Premiums, terms, limits, benefits all vary. So shop around. Evaluate your debt and income to determine the policy that's best. Evaluate your mortgage payment to determine if a given policy will provide sufficient benefits to make the payment when you can't.

• Affiliation. Some policies require an affiliation with a lender, realty agency or other entity. Keller Williams, for example, offers its policy through the Rainy Day Foundation, which requires participation in its home ownership counseling program. New home builders sometimes require that you use their affiliate lender. A California Association of Realtors (CAR) plan, for example, requires that you buy a listing held by a state licensed real estate agent.

"The Mortgage Protection Program was developed to help ease the anxiety of consumers who are concerned about potential job loss and its impact on their ability to pay their mortgage should they purchase a home," said CAR President James Liptak. • Waiting periods. Depending upon the insurer, potential policy holders must be employed full time or for at least 30 hours a week and for a period of time before they can obtain coverage. Once you buy coverage, there is a moratorium of a month or more before the policy's coverage kicks in. After the moratorium, the home owner typically must be out of work some time, say 30 days, before the first benefit is paid.

• Limits, Terms. Benefits aren't paid forever and they may not cover the full cost of your mortgage payment. Some policies pay for six months, some pay nine, others for 12 months. CARs' plan, for example, limits payments to $1,500 a month, for six months. And once funding is depleted, the CAR policies will remain in force, but new policies won't be available.

Some policies require purchase as part of the acquisition process, other policies allow you to buy the insurance whenever, with waiting period provisions, of course.

Other policies require that you finance the premiums along with the mortgage and still other policies allow you to buy coverage as a separate cost and payment.

And now, here's the rub.

Unfortunately, not everyone can buy the coverage.

Typically ineligible are those always on the bottom of the bailout/relief totem pole whenever it comes to special assistance -- hard working self-employed people, independent contractors, work-at-home business owners and the like.

Others ineligible for some or all policies include:

• The already unemployed.

• Individuals under 18 and over 60.

• Retirees at any age.

• People who work in sectors with a high rate of economic distress or existing unemployment.

• Military personnel, especially retirees.

Facing job loss without mortgage insurance? Take a look at the mortgage modification route.

Published: July 9, 2009

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Broderick Perkins parlayed a career in old-school journalism into a contemporary digital news service that really hits home. The award-winning consumer journalist, originally from Wilmington, DE, is founder, publisher and executive editor of the bootstrap DeadlineNews Group, a Silicon Valley-based editorial content and consulting service specializing in residential real estate, consumer news and related editorial consulting services. The DeadlineNews Group includes the website, DeadlineNews.com, offering real estate editorial content and consulting services, and its back shop, the Deadline Newsroom, an open house on news that really hits home. Perkins obtained his formal journalism education from University of Delaware and a journalism boot camp, the Institute of Journalism Education at the University of California-Berkeley. He went on to 20 years of service as a daily newspaper journalist at the Wilmington, DE News Journal and San Jose, CA Mercury News. Perkins covered housing on the San Jose Mercury News reporting team which earned a General News Reporting Pulitzer Prize in 1989 for coverage of the Loma Prieta earthquake. He has also produced real estate, consumer and small business content for the Wall Street Journal, Los Angeles Times, RealtyTimes.com, Nolo.com, Better Homes and Gardens, the National Association of Realtors, Homestore/Move and Intuit/Quicken among more than three dozen publications. In addition to managing the DeadlineNews Group, Perkins most recently served as chief editorial consultant for Nolo's Essential Guide To Buying Your First Home, Nolo, and writes real estate television scripts for RealtyTimes.com.