For the homeowner mortgage life and disability insurance go hand in hand.
If it is your desire to preserve your property for your loved ones after death you buy a mortgage life insurance policy.
If you want to be assured that the home is still yours even if you are unable to earn a living because of permanent disability then a mortgage disability policy should be part of your portfolio. Let us take a look at how life and disability insurance for your mortgage works.
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Mortgage Life And Disability Insurance
- Mortgage Life Insurance
You have a choice of several policies that would provide a death benefit that could be applied to pay off your mortgage, however, the decreasing term life insurance policy is the most popular one. It seems tailor made for this purpose. The death benefit decreases with your mortgage balance and the premiums are affordable.
This is considered the best mortgage life insurance option but there are two other types of insurance that can be applied to your mortgage. We will look at these then we will examine the disability part of your insurance plan.
Other types of policies used are level term life policies which you would buy according to how long the mortgage period is. If you have 20 years to pay on your mortgage you buy a 20 year term policy. If you have 15 years to pay you buy a 15 year term policy.
The amounts paid to your beneficiaries will be substantially more than the amount owed to the bank or mortgage company as the years go by. This death benefit doesn’t decrease.
Sometimes whole life insurance or variable life insurance is used as mortgage life insurance if the purchaser intends to redeem the mortgage early.
At some point the cash value of these policies…usually somewhere between 10 years and 15 years…are equal to the amount owed on your mortgage. You use the cash value to pay off the mortgage. Let us now look at the other part of your insurance policy…the disability part.
- Mortgage Disability Insurance
Mortgage life and disability insurance should put together as one entity. For those who can afford and qualify for it mortgage disability insurance is a good idea. Usually through hard work and stringent saving you buy a house.
You probably intend to live in it for the rest of your life or at least to retirement. You know that if you died prematurely your loved ones would own their home…but what if you became disabled and were unable to work at your job. Could the mortgage be paid until you can return to work?
Mortgage disability insurance would provide sufficient funds to make your mortgage payments during your time away from work. With this disability insurance policy added to the mortgage life insurance policy you now will have a comprehensive mortgage life and disability insurance plan.
Consider mortgage life and disability insurance.
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