Saturday, January 30, 2016

Why You Need Mortgage Disability Insurance

July 10, 2011 by  
Filed under Health & Wellness

People take out mortgage disability insurance due to the fact that they might not able to pay their monthly instalments. This type of cover can be underwritten by the lender at the time you take the loan. There is also an option of having this cover incorporated on your income disability cover by your personal insurer.

Taking this policy ensures that both parties to the loan contract are protected. You have a peace of mind by knowing that your property is protected should you be disabled in any way. You do not have to worry about who will take care of your installment as this will be paid out by the policy. On the other hand the lending institution is also covered in the event of a disability by the borrower.

Pregnancy and injuries that are work related are some of the common reasons why people decide to take this cover. In the event that you are disabled, the insurer will pay your monthly installments but these are determined by your salary amount at the time of your injury. The payout can be anything between 50% and 70% depending with how much you are getting. Having an income disability insurance cover with a different insurer will sometimes result in you getting a reduced amount of cover.

It may be a good idea to allow yourself to wait for a long time before you can start claiming from your policy. This can result in you paying less in terms of premiums. The waiting periods vary, the most common are 30days, 60days and 90days. The longer you wait the more advantage you have.

Some experts recommend policyholders to incorporate this disability insurance into your income disability policy because you are likely to get more from this policy in the event of an injury. You will receive extra money to pay for your personal bills because the money will be directly paid to you. This is different from when you have the policy with the lender; the money is paid directly to the lender.

It is important to note however that this type of coverage is a short term solution to your problem. The insurer can only pay up to a certain period of time. Payments range from a period of say six months to about one year. At the end of the day it is comforting to know that you are taking this insurance in order to get adjusted to your situation, you need to have other ways of securing your mortgage whilst you are recovering.

The good thing about mortgage insurance is that it offers you a peace of mind, and it wise for borrowers to take this cover. In high risk industries like mining and construction accidents are quite common and that is why they should also consider this type of cover.

Andy Albright is the President and CEO of National Agents Alliance the Nation’s leading provider of mortgage protection insurance, generating more than $100 Million a year in revenue. For more industry insight and information visit Andy’s Personal Blog

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