mortagesandforeclosures

by Michelle C. Forshee

Nothing concentrates the mind as much as how much you are worth than purchasing a house. In an instant, you are responsible for an asset which is worth hundreds of thousands of dollars. No wonder you want to buy mortgage life insurance protect your home any way you can.

This is a great protection for your family in the case of your death, but in the more likely circumstance of your disability, neither you nor your family will be protected.

The best way to decide how much you will need in terms of disability insurance is to talk to a financial planner or a life insurance agent. This professional will perform a complete analysis of your income and housing needs; don't forget that your home loan is only a part of the whole cost of living in your home.

Some people believe that carrying disability insurance with their employer, or the standard policy they have through the government will be enough but this will only replace a part of your salary. This means that all of your debt, not just your home related debt, should be calculated. Other consumer loans, such as your car or credit cards, as well as other insurance policies, all have to be kept current. A standard insurance policy is not going to cover all of these in addition to your mortgage.

The options you need to be aware of when choosing mortgage disability insurance are the benefit period, the elimination (or waiting) period and any riders that may be offered.

The simplest feature is the benefit period, which is how long you will be able to receive benefits. Normally the benefit period extends until age sixty five, but savings in premium can be realized if the benefit term is shortened. Perhaps a younger spouse can start collecting social security, adding to total family income, or you may be able to tap your tax deferred retirement funds at 59 .

The next area of concern is the elimination period, how long your disability must exist before you can collect. Again, if you can extend this waiting time, your premiums will be lower. If you have a nest egg that you can use during the initial stages of a disability, you may be able to save substantial money on the policy.

There are often riders that may or may not be for to each homeowner. A common rider is a cost of living rider, that will increase the benefit according to recognized cost of living increases.

understanding all of these options can be confusing, but it is important to be conscious of what exists. Make sure you choose the policy that will save you the most money as well as be best for your needs.

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