Do You Know Enough About Mortgage Insurance ?

By Author: Scott Staudt
Total Articles: 91
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Most people labor long and hard to pay for a home of their own, and want to protect it.

That usually means that they get fire insurance, but what about if they could no longer afford to pay for the home? There is an additional insurance that this will not happen. The mortgage and insurance businesses offer both life insurance and disability insurance on your home.

If you are the main breadwinner in your family, if your income stops, either temporarily or permanently, in all likelihood, your spouse will not be able to make the mortgage payments on the home.

No one likes to consider the idea of their own death, but a good family man will endeavor to protect his family in case of such a tragic occurrence. But if you worry about your loved ones, you will be concerned about whether they will be able to keep the house if you die.

This is the idea behind a mortgage life insurance policy: to pay off the mortgage so the family can keep the house. A decreasing term life policy is the one that most people choose since the amount of the benefit decreases over time as you pay down more and more of your home ...
... loan balance and the required life insurance benefit is lower.

But the death of the breadwinner is not the only threat to home loan payments-if the homeowner is disabled, he will not be able to afford the mortgage either. In the case of disability insurance, the mortgage payments are made while the insured is disabled. Some people think this is not necessary if they have disability insurance at their place of employment, but be aware that this insurance only covers 60 to 70% of earnings, and that may not be enough to pay all expenses, including the home loan.

As a matter of fact, mortgage disability insurance may be a better choice than mortgage life insurance because the possibility of a wage earner becoming disabled are greater than of his death.

In addition, in this era when many, if not most families cannot afford a home unless there are two salaries to support it, joint coverage may be picked and each of the insured parties is covered for half of the mortgage payment. It would not be out of the realm of reason to imagine two income producers becoming disabled because of an accident, but with this type of policy, the home would still be protected.
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