Insurance and Credit

Disability insurance covers some or all of one’s salary in case one is able to work. This type of insurance may be provided by state governments, or by one’s employer. Unemployment insurance is meant to give you some income in case your job is downsized or lost, and workers comp insurance gives you some salary and also covers your medical bills in case you are injured on the job.

Some policies cover illnesses related to the job, but many cover any illness or injury that prevents you from working. Disability insurance is frequently a benefit given by employers at a low rate since it is part of a group package, and employees always have the right to subscribe to more if they prefer.

These kinds of programs are not intended to replace your full salary, but usually only cover a maximum of about 2/3rd of it, and usually less than half. If you have a home loan to pay, this may seem woefully inadequate, since a home loan payment can take up to half of one’s income in many cases. To protect what is probably your biggest asset, you may want to make sure you can keep up with your mortgage payments when you are sick for a while.

This is where mortgage disability insurance takes over. If you have mortgage disability insurance, your mortgage will be paid through the policy, regardless of another disability policy you may have.

If you have mortgage life insurance, it will take care of your family’s obligation to pay off the home loan in the case of your death. But a disability can wreak a great deal of havoc, and life insurance will of course not kick in. If you were not working for an extended period of time, would you or your family be able to carry the mortgage? This is the problem mortgage disability insurance addresses.

In addition, as is the case with so many of today’s households, both earners can be covered if they both contribute to the payments. If you or your partner is injured, and they are covered under the policy, you would still be able to make the mortgage commitment for a few years. You will still receive other disability payments to cover other living expenses.

There are different aspects to each mortgage disability policy, so be sure to understand each. It is important to be clear on all of the features of the policy before you commit to an insurance policy, for example what illnesses and accidents will it cover and if there a time lapse before the insurance will “kick in”. Once you have made all the comparisons of the offers, you can decide which premiums offer the best coverage for your circumstances.

Tags: home, Insurance, life insurance, mortgage, mortgage life insurance, real estate

This entry was posted on Thursday, June 4th, 2009 at 7:18 am and is filed under Life Insurance. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.