Can I Purchase Life and Disability Insurance on My Mortgage?
For most people, their monthly mortgage payment is the single largest payment they make each month. Until your mortgage is paid off, this represents a large financial burden for you and your family. If you pass away or become disabled, mortgage life and disability insurance policies can help pay this bill for you.
Other People Are Reading
-
Mortgage Life Insurance
-
When you get a mortgage, the mortgage lender typically offers you a mortgage life insurance policy. The amount of the premium can be added onto your regular mortgage payment in most cases. This kind of policy provides the bank with a payment in an amount equal to your mortgage balance if you die. The family does not receive any financial benefit, but this kind of insurance does remove the responsibility of the mortgage for your family.
Mortgage Disability Insurance
-
Mortgage disability insurance is another type of insurance policy that can provide you with financial help for your mortgage payment. If you become disabled and you are not able to go to work, this kind of insurance kicks in and provides you with a monthly benefit. Typically, the insurance company will make your mortgage payment for you for a certain amount of time. If you heal and go back to work, the insurance benefits cease.
-
Advantages
-
Both of these types of insurance provide you a financial benefit that pays your mortgage if you are unable to do so. This can give you some peace of mind when it comes to knowing that your family will be taken care of in the future. Another benefit of these types of policies is that you may be able to qualify for them even if you are unable to qualify for regular life or disability insurance. This way, even if you have a health issue, you can still ensure that benefits are provided for your family.
Drawbacks
-
One of the major problems of this type of insurance is that it does not provide any financial benefit directly to your beneficiaries. Instead, it pays the mortgage company directly. By comparison, with life insurance, the benefits of the policy go directly to the beneficiary. Another drawback is that it can overlap the coverage that you already receive from your life insurance. You might be paying for something that you do not really need for your family.
-
