Mortgage Disability Insurance- Is It A Success?

Home is every person’s most-prized possession and in majority of the cases, the homeowner’s sole largest investment. With skyrocketing prices of realty today, many people seek loans to finance their home investments. Such loans meant for the purpose of purchase or renovation of home often require a mortgage to be made on the home. It works as a security for the financial institution in lieu of financing the loan amount.

In such a scenario, if some unfortunate disability strikes the homeowner, who incidentally is also the bread earner of the family, the results would be disastrous for the entire family. The most immediate worry in such a case would be how to take care of the monthly mortgage payments.

Needless to mention, that an inability to service the mortgage timely can result in a person having to forfeit his/her most valuable home investment. This more often than not means the entire family being rendered homeless.

To provide protection from such a frightening possibility, mortgage disability insurance comes to aid. Mortgage Disability Insurance provides insurance coverage in event of a homeowner’s inability to work on account of disability. The disability may be either physical or mental, which results in a person being unable to perform his/her normal work-related duties.

Mortgage disability insurance provides benefits equivalent to monthly mortgage payments. The idea is to provide remuneration to take care of a person’s mortgage obligation and protect his/her home.

The premiums are quite low and can be easily paid off while one is working. The benefits are paid up to the completion of the benefit term as decided by a person at the time of taking the policy. The cover may be taken for any where between two years up to the age of sixty-five years.

Although, mortgage disability insurance provides coverage for mortgage payments in event of a disability, it does not cater to the other financial and basic requirements of a family struck by disability. These financial worries still continue to loom as issues of major concern, even though the mortgage payments get taken care of.

The benefits get paid only till the benefit term decided initially, which may not always be enough. Also, the insurance company would have its own set of limited definitions for disability, which a person may not always be able to fulfill.

It is a better deal to go in for some other insurance that can completely take of the mortgage, in event of a disability. Although the premiums may be high, the policy should have the potential to pay up sufficiently in case of need.