What Is Mortgage Disability Insurance?

Mortgage disability insurance is an insurance plan designed to provide you with money to pay your mortgage loan payments if you become disabled or you are unable to work. Generally, you must be disabled for 30, 60, or 90 consecutive days before your insurance will cover your financial responsibilities. This type of insurance is a good idea if you are in poor health would face higher than usual premiums for a regular life insurance policy.

Do I Really Need Mortgage Disability Insurance?

Maybe. Keep in mind that mortgage disability insurance only pays for one debt: your home mortgage. What this means is, if you die, that you will not be able to pay any other debts with this money. If you become disabled or you die, your family and dependents will probably need to pay for more than just the mortgage. It is probable that you will need to generate an income to meet a variety of financial obligations such as medical debts and living expenses. In some cases, it may be a better idea to buy regular life insurance policy. Therefore, it is important to take into consideration your entire financial picture be before buying any kind of life or mortgage disability insurance.

How Do I Know If I Need Mortgage Disability Insurance?

The best way to know is to contact a financial planner or life insurance agent. They can perform what is known as a "needs analysis." A needs analysis is an overall financial picture of your short-term and long-term finances. With this analysis, you'll understand what kind of liabilities your spouse and your dependents would be faced and how much income they would need if you were gone. By knowing that, you'll be able to buy enough insurance to meet those needs. Then, your insurance agent can help you pick out the right insurance plans to cover you and your family.