The Benefits of Mortgage Disability Insurance

The Social Security Administration reports that one out of five individuals are stricken with a long-term disability before reaching age 65. The United States Department of Urban Development has estimated that close to fifty percent of foreclosures are related to a homeowner becoming disabled. These statistics from reputable entities indicate why mortgage disability insurance is such an important factor for homeowners to contemplate purchasing. There are numerous benefits related to mortgage disability insurance.

Mortgage disability insurance is designed to pay a portion of a homeowners mortgage payment if they become disabled for a period of time. Individuals who opt to take advantage of this type of insurance need to take care to understand the policy completely. Determine the length of time the policy will pay mortgage payments during an episode of short-term or long-term disability. What percentage of the mortgage does the policy pay? Is there a waiting period associated with payment from the policy? Consumers seriously considering a specific policy need to questions the verification process that is involved in the determination of a disability that warrants payments from the policy.

The premiums for this type of insurance are typically very reasonable and, if purchased through the mortgage holder, can often be paid along with the monthly mortgage payment. Homeowners may want to consider doing some comparison shopping when making this purchase. There are many insurance providers online that outline their coverage and premiums with no cost or obligation for a quote. Consider checking with the insurance company that provides auto coverage. Insurance companies frequently extend discounts to customers that carry multiple policies with a single insurance business.

Individuals who are self-employed or retired should seriously consider the benefits of mortgage disability insurance. This population probably doesn't have disability insurance through an employer. This insurance option can be critical to their financial well-being. An illness or disability can strike at any time. Individuals who are employed in occupations that are at a high-risk for injuries are also a population that needs to research this option to protect their home. Construction workers and those involved in manufacturing jobs are examples of these types of occupations.

It's a good rule of thumb to have a savings of at least six months of living expenses (including mortgage payments). There are a vast number of people who are unable to achieve such an "emergency fund" because they simply don't make enough money to set aside this type of security savings. This is the main benefit of mortgage disability insurance. A mortgage payment is likely the largest monthly living expense for everyone. If a mortgage payment was being paid during a period of disability, it would be much easier to take care of the other living expenses. It might be easier to achieve an "emergency fund" that could cover several months of living expenses not including a mortgage. The benefits of mortgage disability insurance make this type of coverage a smart option for many homeowners.