Mortgage Disability Insurance

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Mortgage Disability Insurance: An Overview

Mortgage Disability Insurance is a type of insurance policy designed to cover your mortgage payments if you become disabled and unable to work. This insurance ensures that your most significant financial commitment, your home mortgage, is protected during difficult times.

Mortgage Disability Insurance

Key Features of Mortgage Disability Insurance

  • Coverage: Pays your monthly mortgage payments up to a certain amount.
  • Eligibility: Depends on your health, occupation, and income.
  • Benefit Period: Duration of payments varies, often until you can return to work or for a set period.

Shop for disability insurance in The Annuity Expert Insurance Marketplace

How It Works

If you become disabled, after a waiting period (typically 30 to 90 days), the insurance begins to pay your mortgage. This payment continues for the duration of your disability or until the end of the policy term.

Benefits of Mortgage Disability Insurance

  • Financial Security: Provides peace of mind knowing your mortgage is covered.
  • Protection of Investment: Helps keep your home from foreclosure due to non-payment.
  • Ease of Stress: Reduces financial burden during a challenging time.

Considerations When Choosing Mortgage Disability Insurance

  1. Cost: Premiums vary based on your age, health, occupation, and mortgage size.
  2. Policy Terms: Understand the waiting period, duration of benefits, and coverage limits.
  3. Exclusions and Limitations: Be aware of what types of disabilities are covered.

Example Scenario

Imagine a homeowner with a monthly mortgage payment of $1,500. If they suffer an injury that prevents them from working, their mortgage disability insurance would cover the monthly payment, ensuring their housing stability.

Is Mortgage Disability Insurance Worth It

Conclusion

Mortgage Disability Insurance provides essential protection for your home, safeguarding against the financial impact of unexpected disability. It’s a strategic way to ensure that your most significant investment is secure, even in times of personal health crises. Contact us today for a free quote.

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Frequently Asked Questions

What is mortgage disability insurance?

Mortgage disability insurance provides coverage that pays your monthly mortgage payment if you become disabled and unable to work. It ensures your home loan continues to be paid during your disability period, preventing default or foreclosure. Coverage specifics and duration vary by policy.

Does disability count as income for a mortgage?

Yes, disability income can be considered qualifying for a mortgage if it’s long-term and expected to continue. Lenders typically require documentation, such as award letters or benefit statements, to verify the amount and duration of the disability income.

What is the benefit of buying mortgage disability insurance?

The benefit of buying mortgage disability insurance is that it provides financial protection by covering monthly mortgage payments if you become disabled and can’t work. This reduces the risk of defaulting on your mortgage, potentially losing your home, or depleting savings during a period of disability. It offers peace of mind for homeowners.

What is the average cost of mortgage disability insurance?

The average cost of mortgage disability insurance varies widely based on factors such as the loan amount, the policy’s terms, the covered disability definition, the benefit period, the waiting period before benefits start, and the applicant’s age, health, job, and location. Generally, premiums can range from $30 to $70 monthly for every $100,000 borrowed, but this is a broad estimate. It’s essential to get individualized quotes from insurance providers for accurate pricing.

Is there an age limit for mortgage disability insurance?

Yes, most mortgage disability insurance policies have age limits. Typically, insurers set a maximum age for policy initiation, often between 50 to 60 years old, and may also set an age at which coverage terminates, commonly around age 65 when most individuals qualify for retirement benefits. Exact age limits vary by insurer and policy.

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Shawn Plummer is a Chartered Retirement Planning Counselor, insurance agent, and annuity broker with over 14 years of first-hand experience with annuities and insurance. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

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