Mortgage disability insurance is a type of coverage that you take when you become disabled as a result of an accident or illness. Typically, it takes care of your monthly mortgage payments, either wholly or partly. It is also known as mortgage payment protection insurance, and it will ensure you for a specific time when you are ill.
How Mortgage Disability Insurance Works?
You can buy it as a rider on your mortgage life insurance or a stand-alone policy. When diagnosed with a disability, the plan will start paying part of your mortgage every month. The waiting period can be anywhere between 30 to 60 days, meaning that you will have to cover the mortgage payment of one or two months.
How Long Does the Coverage Take?
When it comes to coverage, it might take about two to three years until you recover. It is an estimation of how long someone who is temporarily disabled takes to heal. After that, you will need to find other means of meeting the payments since the insurance will come to an end.
What is the Eligibility Requirement?
First, you should be 18 to 64 years of age to apply for the insurance. You will go through a series of health questions to be eligible for the coverage. It is prudent to be honest so that you can get approval. If you work for 20 hours a week or more, your chances of getting the coverage are exceptionally high.
Benefits of Mortgage Disability Insurance
Mortgage disability insurance comes with bountiful benefits that you can enjoy. For starters, the policy is tax-free and is lenient on the underwriting requirements. What’ s more; it is budget-friendly as it comes with weekly, semi-monthly, and monthly payment options. The waiting period is reasonable since you don’t have to wait for more than two months.
Premium Calculation for the Insurance
The premium amount that you will pay depends on certain factors that the financial institution considers. They include age, occupation, health, and mortgage amount. For instance, if you work in a hazardous environment like construction, you will pay higher premiums as compared to if you are in an office. The money goes to your lender; thus, you will not see the coverage. The premium payments can be monthly or once or twice annually.
Where can you get the Mortgage Disability Insurance?
You can find the insurance with sheer simplicity in credits, banks, and other financial institutions. Look for a reputable organization that will not take you round in circles. Those that have vast experience and knowledge in the area are the best.
Subsequently, mortgage disability insurance offers you protection when you are disabled. The highlight is that it will not leave you hanging when you are still ill. Plus, you can take it as a stand-alone policy or as a group depending on your needs and expectations. You should talk to your mortgage provider to know more about the terms and conditions.