Should I Consider Buying Mortgage Life and Disability Insurance?

Mortgage life insurance goes hand in hand with disability insurance, as they both are used to make sure that you can keep your home should there be a crisis. Mortgage life insurance will allow your loved ones to be able to keep your house should you pass away, offering them a better future. Disability insurance, on the other hand allows you to continue to pay for your home if you should become disabled and unable to continue working, which would greatly diminish your household’s income.

Mortgage Life Insurance

This type of insurance is used to pay for your mortgage should you suddenly pass away. This will keep the burden off of your family and will eliminate the need for them to choose between paying the mortgage or letting go of the house. The amount you have to pay decreases as your total mortgage decreases, so your payments are relative to the amount of money the insurance company would have to pay if you died.

You also have a second option with this type of insurance. Instead, if you have a set time in which your mortgage will be paid off, let’s say twenty years, then you would have to pay a set amounts for those twenty years. Unfortunately, that amount would not decrease as your mortgage increased and you will end up paying more than your mortgage is worth by the end of it. This is why most people like to go with the first policy, even though it costs more than your mortgage as well, it doesn’t cost as much and it decreases over time.

Disability Insurance

Mortgage disability insurance is meant to help you pay your mortgage should you become temporarily injured or severely disabled. If you did not receive worker’s compensation for becoming injured, which usually occurs because of an injury that is not work related, then you will not have money to pay your mortgage. This could cause you to lose your home, which would be devastating. Instead, during your time off of work, your insurance kicks in and begins to pay your mortgage. This allows you to keep your home and prevents you from being unable to pay for it. Sadly, hundreds of people lose their home each year due to a disability that causes them to be unable to pay for their home. This insurance will help you prepare for the future so that you don’t become one of those statistics, which could happen with just one accident.

While these two types of insurance should be in a single policy, they are not. The need to buy either policy changes from person to person, but either policy could end up saving your home. These policies are meant to prepare you for the future, but can be difficult to pay for. In our rough economy, not everyone can afford to pay for one of these policies, but if something bad were to happen they definitely would not be able to pay for the crisis. It is a risk, an expensive one at that.