Benefits Of Mortgage Life & Mortgage Disability Insurance
When a person takes the major step of purchasing a home, there are many decisions to make. Two important decisions buyers must make involve mortgage life insurance and mortgage disability insurance. Both forms of coverage are offered as part of the mortgage insurance policy. Although these forms of coverage may not be ideal for each person’s situation, there are several advantages to consider in order to make the best decision.
Mortgage Life Insurance Advantages
1. Peace Of Mind
If a terminal illness strikes a homeowner, the mortgage life policy covers the rest of the loan. If the homeowner dies suddenly, the policy also covers the loan. This means that the mortgage is repaid in full regardless of the amount owed. Borrowers can rest easier knowing that their survivors will not have to struggle to make the mortgage payments. Many people do not have enough individual life insurance in separate policies to cover monthly payments and living expenses, so this is a great benefit.
2. Extensive Coverage
The coverage for these policies is near universal. In addition to this, underwriting is minimal. No blood samples or medical exams are required for most policies. For those who have serious preexisting conditions that may be disqualifying factors in regular policies, this benefit is ideal.
Mortgage Disability Insurance Advantages
1. Lower Premiums
For those who have separate disability policies, it is possible to obtain income replacement and mortgage coverage. However, the premiums are higher. Adding mortgage disability insurance is not redundant. Most people who become disabled find that their individual policies do not cover all expenses. By adding this type of coverage, homeowners will find it easier to pay other monthly obligations. Keep in mind that the extra money would have to come out of the individual policy. Funds for the mortgage disability insurance policy would be paid directly to the lender.
2. Ownership Security
Overall, mortgage disability coverage is advantageous. Almost every person who owns a disability policy does not have enough coverage. Most people think incidents resulting in disabilities will never happen to them. However, HUD reported that over 50 percent of today’s home foreclosures happen because of personal disabilities. When people find that their personal policies do not provide enough for new medical expenses, monthly obligations and a mortgage, they fall behind. By adding a sure mortgage payment coverage, homeowners do not have to worry about losing their houses.
In some cases, individuals may have enough separate coverage aside from these policies. However, this is very rare. For the affordable premiums of these policies, homeowners enjoy more secure living. The monthly number of foreclosures is still very high, so protecting a home is something that should be a priority for every homeowner and prospective buyer.