Nothing concentrates the mind as much as how much you are worth than purchasing a house. In an instant, you are responsible for an asset probably worth hundreds of thousands of dollars. No wonder you are thinking about mortgage life insurance protect your home any way you can.
This protects your family if you are dead, but what protects you, what keeps you in the home if you are unable to pay your home loan in case you are disabled and unable to work and earn your normal salary?
The best way to determine how much you will require in terms of disability insurance is to consult with a financial planner or a life insurance agent. Normally a professional such as this will review your needs and do an analysis of your income and your mortgage and home related expenses such as property taxes, hazard insurance and maintenance as well as your other finances to find out what would best fit your needs.
Just because you already possess disability insurance from work or a government program, don't expect that to cover what is most likely your single largest cost, your mortgage. All your other expenses have to be paid as well during the time you are disabled. Other consumer debt, such as your car or credit cards, as well as other insurance policies, all have to be kept current. You will quickly see that your stand alone disability policy is not going to be enough to cover your mortgage and other home related costs, in addition to these other expenses.
Make sure you are clear on the basics before you go shopping for mortgage disability insurance, such as what the benefit period is, how long the elimination period is and what riders are offered.
The simplest feature is the benefit period, which means how long you will be able to receive benefits. In most policies, the benefit period goes to age 65, but if you can shorten it because you can count on some supplementary income before then, you can save a lot of money. For instance, if your spouse may be collecting retirement benefits before then, or if you can start withdrawing your own retirement benefits without penalty.
Question the broker about the elimination period, the length of time you have to wait before you start collecting. Extending this period is another way to lower premiums. If you have a nest egg that you can use during the initial stages of a disability, you may be able to save substantial money on the policy.
Many companies will have certain riders that may be added in certain cases. The most popular rider, since living costs always escalate, is the inflation rider.
Since there are so many options to examine, it is critical to understand them before you sign up for mortgage disability insurance. Make sure you choose the policy that will save you the most money and be best for your needs.
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