Mortgage Disability Insurance: Coverage During Hard Times

Mortgage disability insurance helps you keep up with your mortgage payments in case you become too ill or get an injury that limits you from working. Once you take out a mortgage disability insurance policy, it will apply for a limited time or only cover a percentage of the monthly payments.

The payments differ depending on your policy; for example, you may receive between $1000 and $2000 per month for between two and five years. Insurers use your average salary at the time of your injury or illness to determine your monthly payouts, with many of them paying between 50 and 70 percent of your average monthly income. If you have other types of disability insurance policies or disability insurance from your employer, your mortgage insurers may limit their payments.

Once your insurer makes a payment, it is upon you to look for the money you need to clear the balance. However, a mortgage disability insurance will allow you to use your other payments or savings on other expenses that may crop up in the course of your injury or illnesses.

Many mortgage disability insurance policies come with a waiting period of 30, 60 or 90 days before you can receive any payments. You can always specify the waiting period; shorter waiting periods mean higher premiums. If you have enough savings to help you keep up with your mortgage payments in the waiting period, choose a longer wait to make considerable savings on your policy premiums.