Learn how disability insurance works

Mortgage Insurance for Disability

Filed under: Disability Insurance — Alston @ 5:30 pm February 11, 2011

Making sure that you can pay for your mortgage even if you are too sick to work is a big part of financial security. A lifetime of savings can be wiped out in a very short time if your income stops or is reduced to the monthly payments you might get from Social Security or other government-based programs.

Although disability causes more families to lose their homes than death does, many who choose mortgage life insurance do not opt for the protection offered by mortgage disability insurance. One reason more term and other mortgage life insurance is sold is this is that life insurance is easier to qualify for and can be less expensive. (You can request mortgage insurance for disability quotes on this site.)

This price difference should be a clue that disability is more likely to happen during your working years and that you might be more likely to need the benefit of disability coverage during your working years. Although your insurance company may price a long term disability policy designed to replace a given amount of income will cost most people more than a life insurance policy designed to replace the same amount of income, disability insurance is affordable for most people.

There are several factor s that impact the premiums that you might pay to an insurance company for a mortgage disability insurance plan. One is gender. Male is better. (Sorry ladies. Don’t be mad, you get a lower rate for life insurance.) Health history including height and weight are factors. Age matters also. Younger is better. Occupation is another big factor that impacts payments. The less risky and physical your job is the less likely you are to have a claim and the cheaper your rate will be.

This means that a young healthy male accountant will get lower quotes for disability insurance than a mature female skydiver with a medical condition if they request the same monthly benefit. Fortunately, younger healthier folks can usually lock in their rate for coverage based on their current age, health history and current occupation.

Of course, you can purchase a “regular” long term disability insurance policy that covers all your needs; you don’t need to purchase a separate plan to cover you mortgage. In fact, separate policies will often cost more.

However, a policy that is tied to your employment should not be your only disability protection. If you lose your job, or start your own business, you can lose your coverage.

It is important to have enough disability insurance protection. It is also important that you have it when you need it. For this reason, your insurance should not be tied to the company you work for.

It is important to have enough long term disability insurance to cover the necessities of life. Mortgage disability insurance can help keep a roof over your head. Government programs may not be enough to help you come close to maintaining your lifestyle.

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