Mortgage disability insurance- A general idea

Life is unpredictable; anything may happen without any notice. If you’re buying a home, you need to buy mortgage life insurance, so that your mortgage gets paid off, in case of your death. Along with it, you should also buy mortgage disability insurance, in case, you become disabled in future and cannot earn to repay the mortgage.

What is mortgage disability insurance?

Mortgage disability insurance is a contract between you and the policy company, which agrees to pay the remaining monthly payments towards your mortgage, if at any time in the future, you become disabled and are unable to work or become bedridden due to an injury, illness or any other medical emergency.

Your disability insurance will replace your income and make the monthly mortgage payments. The amount you will receive as income replacement is more or less from 50% to 70% of your salary. You will have the option of receiving it monthly or annually. You need to pay a fixed premium to the insurance company to provide you with this coverage. You need to search around to buy the insurance from a reliable and authentic insurance company.

Types of mortgage insurance policy

Generally, there are 2 main types of mortgage insurance policy. These are:

* Voluntary: It is a voluntary one, which you can opt to but just like any other insurance policy. It ensures to pay for your mortgage, in the event of your illness or death or disability to earn.

* Involuntary: If you buy your home and cannot make 20% down payment, you have to pay out the premium, even after the mortgage money has been covered.

Cost of mortgage disability insurance

The cost of disability insurance depends on several factors, as follows:

* The amount of your monthly mortgage payment

* Your age at the time of application

* Your elected percentage of coverage

Eligibility for mortgage insurance

You can buy the mortgage insurance if you meet the following criteria:

* You should be at least 18 years but not more than 65 years

* You should be a US citizen

* You must have a permanent job

* You must be physically capable of performing your regular duties

It is a very serious and complex decision whether or not to buy mortgage disability insurance, as your financial situation is taken into account. If you think in the event of your death or disability, there are other strong options to pay for the mortgage, you need buy the insurance. Otherwise, you can take advantage of this insurance and ensure that your family doesn’t lose their home due to some unfortunate event.

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