What is Mortgage Disability Insurance?
by Gordon N. Leachman
You may be familiar with disability insurance, which is an insurance plan that assists you in case you are disabled and not able to work. Some states provide disability insurance as part of a package of programs such as unemployment insurance and workers compensation insurance alberta mortgage rates. The concept is like unemployment insurance in that if your salary is cut off, in this case because you cannot work, not because your job has been eliminated, you will still receive an income.
There is a policy known as workman’s compensation insurance, which will cover a worker injured at work. Many times employers provide this benefit to employees at advantageous group rate, and individuals also have the ability to protect themselves by buying their own disability insurance.
Disability insurance usually only replaces some of one’s full income, many times not more than half. As we all know, making the mortgage payment each month is hard enough with 100% of your salary; picture the burden if you were only receiving 2/3rds of your salary. To protect what is probably your biggest asset, you may want to make sure you can manage your mortgage payments when you are sick for a while.
Your mortgage disability insurance is critical in such a situation. If you have mortgage disability insurance, your mortgage will be paid via the policy, regardless of any other disability policy you may possess.
If you have mortgage life insurance, it will cover your family’s obligation to pay off the mortgage in the case you die. But would your family be able to pay the mortgage if you became sick or disabled and unable to work? If you were unable to work for an extended period of time, would you or your family be able to carry the mortgage? A mortgage disability insurance policy would given them enough funds to make your mortgage payments during the time you are unable to work.
Many times, the salary of both wage earners is necessary to pay the mortgage; in this case, both should have coverage under a mortgage disability policy. If you or another covered member of your family is disabled in an accident that is covered by the mortgage insurance policy, the insurance coverage will give you the cash for you to pay your mortgage for up to two or three years, depending upon the policy. You will still get other disability payments to cover other living expenses.
Each policy varies, so it is important to get a good understanding of each policy calgary mortgage rate. Make sure you understand and are at ease with all of the terms, since not all illness will be covered, and there can be waiting periods. Then you can compare the premiums of each company with the benefits they offer to find the most cost effective.
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