mortagesandforeclosures

by Michelle C. Forshee

Nothing concentrates the mind as much as how much you are worth than purchasing a house. In a flash, you are responsible for an asset probably worth hundreds of thousands of dollars. You have most likely already started considered protecting it via mortgage life insurance.

This protects your family if you are dead, but what protects you, what keeps you in the home if you are not able to pay your mortgage in case you are disabled and unable to work and earn your normal salary?

The best way to decide how much you will require in terms of disability insurance is to consult with a financial planner or a life insurance agent. This professional will do 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.

Even if you already have disability insurance from a government program or from your place of employment, this is normally based on a "maximum qualifying" debt to income ratio of 36 to 50. You have to consider all of your debt when you consider being disabled. You may have a car loan, credit cards and other fixed expenses that you have to continue paying. Your disability policy will be unlikely to cover all of those expenses and your mortgage expenses as well.

Make sure you understand the basics before you go shopping for mortgage disability insurance, such as what the benefit period is, how long the elimination period is and what riders are offered.

The simplest feature is the benefit period, which is how long you will be able to collect benefits. This is usually through 65 years of age, but if you can shorten that period, you can save a lot in premiums. Perhaps a younger spouse will start collecting social security, adding to total family income, or you may be able to take out some of 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 receive a benefit. Needless to say, the more extended the waiting period, the lower the premiums. If you have saved for a rainy day, this may be the rainy day, and you can save a lot of premium expense if you have these funds to cover you for a period of time.

Many companies will have certain riders that can be applicable in certain cases. The most popular rider, since living costs always escalate, is the inflation rider.

Viewing all of these options can be confusing, but it is important to be conscious of what exists. This allows you to ask the best questions and get the right policy.

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