People take out mortgage disability insurance due to the fact that they might not able to pay their monthly instalments. This type of cover can be underwritten by the lender at the time you take the loan. There is also an option of having this cover incorporated on your income disability cover by your personal insurer.
Taking this policy ensures that both parties to the loan contract are protected. You have a peace of mind by knowing that your property is protected should you be disabled in any way. You do not have to worry about who will take care of your installment as this will be paid out by the policy. On the other hand the lending institution is also covered in the event of a disability by the borrower.
Work related injuries or that time when you are pregnant are some of the reasons why you can take this cover. The benefit that you get is determined by your monthly salary, it can range between 50% and 70% of your monthly income. In cases where you may have income disability insurance with another insurer, the benefit that you get from the lender is likely to be reduced.
Different insurers and policies have got different terms and conditions. You will find that some policies have 30days waiting period whilst some can have up to 90days before you can claim from the insurer. Experts recommend the longer waiting periods as you are likely to pay less premiums.
It is also a good idea to have the policy incorporated into the main income disability cover as you are likely to benefit more from such an arrangement. The money is paid to you directly unlike with a mortgage policy whereby the lender will be paid directly. The extra amount you get can be used on other personal bills and expenses.
Taking this policy however offers a short term solution. The benefit is for a short period of time, up to about twelve months. It gives you a chance to recover from your disablement and arrange other ways of dealing with your circumstances. If the injury is permanent for example you might need to find ways of securing your loan so that you do not lose the property.
Mortgage disability insurance is something that every borrower must get so that you have a peace of mind. Some workers are considered high risk especially those in the construction and mining industry, injuries are more likely to happen to these workers. It is therefore important to have this type of cover.
Taking this policy ensures that both parties to the loan contract are protected. You have a peace of mind by knowing that your property is protected should you be disabled in any way. You do not have to worry about who will take care of your installment as this will be paid out by the policy. On the other hand the lending institution is also covered in the event of a disability by the borrower.
Work related injuries or that time when you are pregnant are some of the reasons why you can take this cover. The benefit that you get is determined by your monthly salary, it can range between 50% and 70% of your monthly income. In cases where you may have income disability insurance with another insurer, the benefit that you get from the lender is likely to be reduced.
Different insurers and policies have got different terms and conditions. You will find that some policies have 30days waiting period whilst some can have up to 90days before you can claim from the insurer. Experts recommend the longer waiting periods as you are likely to pay less premiums.
It is also a good idea to have the policy incorporated into the main income disability cover as you are likely to benefit more from such an arrangement. The money is paid to you directly unlike with a mortgage policy whereby the lender will be paid directly. The extra amount you get can be used on other personal bills and expenses.
Taking this policy however offers a short term solution. The benefit is for a short period of time, up to about twelve months. It gives you a chance to recover from your disablement and arrange other ways of dealing with your circumstances. If the injury is permanent for example you might need to find ways of securing your loan so that you do not lose the property.
Mortgage disability insurance is something that every borrower must get so that you have a peace of mind. Some workers are considered high risk especially those in the construction and mining industry, injuries are more likely to happen to these workers. It is therefore important to have this type of cover.
About the Author:
Andy Albright is the President and CEO of National Agents Alliance the Nation's leading provider of mortgage protection insurance, generating more than $100 Million a year in revenue. For more industry insight and information visit Andy's Personal Blog. Free reprint available from: Reasons Why You Need Mortgage Disability Insurance.
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