What is Mortgage Disability Coverage?
by Gordon N. Leachman
The concept behind any kind of disability insurance is simple: it is to provide an income in case your salary is cut off due to accident or illness. Some states have disability insurance as part of a package of programs such as unemployment insurance and workers compensation insurance. It is like unemployement insurance, that if your salary stops because you are injured or become ill, you can receive part of your earnings, but it covers inability to work, not lack of work.
There are workman’s compensation disability policies, which are related to loss of job because of accident or illness on the job, but many policies cover all disabilities, job related or not mortgage broker in calgary. A company’s disability insurance policy is usually a low cost benefit given as part of a group insurance plan.
Disability insurance normally only replaces some of one’s full income, many times not more than half. With a monthly mortgage payment such a large piece of each month’s expenses, this kind of insurance will barely cover it for most people. And since your house is probably your most valuable asset, youshould want to protect it.
This is the part where mortgage disability insurance is intended to play. Your mortgage disability insurance will pay the mortgage, leaving any additional disability benefits available for other expenses.
If you have life insurance of appropriate size, or mortgage life insurance, your family would be in a position to pay off the mortgage should you pass on. But disabilities are much more likely to occur than death edmonton mortgage rate. Would the mortgage be kept current until you were able to return to work so they don’t have to risk losing the family home? This is the situation that a mortgage disability insurance policy would be for.
If there are two wage earners in the family, they can both be covered by mortgage disability insurance. If you or your spouse is injured, and they are covered under the policy, you would still be able to keep up the mortgage payments for a few years. And if s/he were receiving disability payments, they would not be impacted.
You have to understand the terms under which you can access the policy; policies differ greatly. For example, some policies exclude some illnesses, some policies have waiting periods, and so on. Armed with all of the information regarding the policies available, you will be in a position to choose the right policy for you.
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