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Mortgage disability insurance is protection that can help you stay in your house if you become injured or ill and can no longer work. But other types of insurance could cover a wider variety of bills if you’re unable to work due to disability.
Mortgage disability insurance is a specific type of insurance designed to cover your monthly mortgage payments if you become disabled. Also known as mortgage payment protection insurance, this policy will pay for some or all of your monthly mortgage payments while you are disabled for a specified period of time.
Mortgage disability insurance is not life insurance. It will only cover your mortgage payments if you’re disabled due to a covered injury or illness.
Mortgage disability insurance can either be bought as a standalone policy, or as a rider on a mortgage life insurance policy. Once you’re diagnosed with a disability, either temporary or permanent, your policy will start paying a portion of your mortgage payment each month.
The policy typically has a 30- or 60-day waiting period, which means you’ll be responsible for paying the first or second month’s mortgage payments after your disability diagnosis. Once the policy kicks in, the insurance company will directly pay your mortgage company, meaning you won’t see the money but your payments will be made.
The standard length of coverage on a mortgage disability insurance plan is one to three years, which is the most common amount of time for people to recover from a disability, or find alternative ways to pay for a mortgage.
Mortgage disability insurance may be worth it if you have a high-risk occupation or a pre-existing condition. Otherwise, you may be eligible for a stronger disability policy.
Mortgage disability policies are usually guaranteed issue, which means that if you have health problems or work in a high-risk profession it won’t affect your approval for this coverage. However, finding alternative life or disability policies may be difficult.
Examples:
If you’re open to reviewing your traditional disability policy options, use the table below. Check the compare box below the providers then click compare to see the details listed side by side.
This type of insurance is narrow and specific, which means the options for riders are limited.
Many times mortgage disability is a rider itself on a mortgage life insurance policy. Common riders available when purchased as its own policy include:
If you’re in good health or work in a low-risk profession, look into other options that can better fit your budget and needs:
Mortgage disability insurance is a useful protection plan that can help you keep your house if you’re disabled due to injury or illness. Unless you have health issues or work in a high-risk profession, there may be better options. Before buying a mortgage disability policy, compare disability insurance companies.
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