Mortgage disability insurance

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.

What is mortgage disability insurance?

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.

How does mortgage disability insurance work?

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.

Is mortgage disability insurance worth it?

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:

• You have pre-existing health conditions and work as a roofing contractor, which is considered a high-risk occupation. If you’re the sole breadwinner in your household, then a mortgage disability policy might make sense. It could be difficult for you to secure other forms of disability insurance, and your mortgage payments depend entirely on your ability to work.
• You’re healthy and work in a low-risk profession, such as an office job, then traditional disability may better fit your needs. This coverage often costs less and offers greater flexibility in how the benefit amount is used.

Compare disability insurance companies

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.

Sort by:

Name	Product	Coverage Amount	Benefit period	Waiting period	Own Occupation	Medical exam required
Policygenius Disability Insurance		$100 to $20,000	2, 5, or 10 years or until age 65 or 67	60 - 365 days	Yes	Depends on provider	Get matched with one of 15 top life insurance companies to find the best coverage and rates for you.	Go to site More Info	Compare	loading Fetching your data...
JRC Life Insurance		$500 to $20,000	2 year to lifetime	30 - 365 days	Yes	Yes	Compare policies up to $10 million from 45+ top insurance companies with the click of a button.	Go to site More Info	Compare	loading Fetching your data...
Breeze		$500 to $20,000	1, 2, 5, or 10 years or until age 65 or 67	30 - 365 days	Yes	No	Secure long-term disability insurance online by filling out an easy 10-minute application, even if you're a high income earner.	Go to site More Info	Compare	loading Fetching your data...
LeverageRx		$100 to $20,000+	1, 2, 5, or 10 years or until age 65 or 67	30 - 365 days	Yes	Depends on provider	Compare disability insurance for doctors on this exclusive marketplace for medical professionals.	Go to site More Info	Compare	loading Fetching your data...

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Mortgage disability insurance riders

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:

• Return of premium. Reimburses the premiums you’ve paid into the policy once the term expires. You’ll pay up to 30% more to add this coverage to your policy.
• Related mortgage expenses. Extends your mortgage coverage to homeowners’ insurance, association fees and related expenses.
• Unemployment waiver of premium. Pauses your mortgage repayments while you look for new employment after involuntarily losing your job.

Pros and cons

Alternatives to mortgage disability insurance

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:

• Short and long-term disability insurance. Standard disability insurance offers stronger coverage than a mortgage disability policy, as it replaces a portion of your monthly income and lets you decide how you spend it.
• Supplemental disability insurance. Designed to fill the gap between the amount of income paid by a short and long term disability plan and the rest of your income.
• Traditional term life insurance policy. You might be able to add some type of disability rider to your term life policy. The benefits will likely be more narrow than having a short- and long-term disability policy but could provide some level of protection.
• Mortgage life insurance. Disability policies only cover you if you’re disabled, which means they are best used as a rider on a mortgage life policy. This allows you to cover both disability and premature death.

Bottom line

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.

Frequently asked questions

• Is there a rider that covers premature death?

  No, you can’t put a life insurance rider on a disability policy, although you can usually put a mortgage disability rider on a mortgage life policy.

• Does my employer offer disability?

  Many employers do offer some type of disability protection. Check with your employer to see what is covered and for how long.

• Can I get a shorter waiting period than 30 days?

  Possibly. Some insurance companies will offer anywhere from a 0 to 90 day waiting period. The shorter the waiting period, the higher your premiums will be.