Mortgage Disability Insurance

Written by Patricia Tunstall
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Mortgage disability insurance is probably not considered as crucial as health, auto, or other disability insurance. Homeowners, however, do obtain insurance on their property, for they know their home is their largest asset. We are all aware that a house can burn down, or that it can be damaged by fire, wind, storms, lightning.

Think about the very real possibility that you could lose your home through death or disability. What would you do if you became disabled, or your working spouse became disabled? Almost everyone has mortgage payments; rarely does a homeowner have their home paid off. Often, these payments are large.

Benefits and Exclusions

Mortgage disability insurance is designed to fund your payments for a certain period of time, often up to three years. If both spouses are working, both can be insured. As with other disability insurance, premiums are waived after the disability continues for a specified period of time. Also similar is the provision that you can designate a waiting period of 30, 60, or 90 days.

Disability insurance companies typically exclude any loss caused by suicide attempts or any self-inflicted injury. They do not cover any loss as a result of war or serving in the armed forces. Pre-existing conditions usually prevent any benefits from being paid. No benefits will be paid after you turn 65, but if you become totally disabled after age 64, most policies will pay benefits for 12 months. This kind of disability insurance may not often be thought of, but it can provide security for your future.

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