mortagesandforeclosures

by Brandon P. Nadeau

There are merely two mortgage insurance products. There is mortgage life insurance to guarantee that your home loan will be paid in case of your death. This kind of insurance can be decreasing term or fixed; your type of mortgage will determine which. There is mortgage disability insurance, which will guarantee that your mortgage payment will be made in case you are disabled and cannot work.

But behind these basic policies, there are some choices homeowners have to make in terms of their policies.

In discussing a mortgage liability insurance policy, be sure you are clear on whether your broker is discussing a partial disability policy where you get a predefined amount during the disability period, or a residual policy where you get a percentage of your income.

You may have a choice between short term disability insurance in which the policy will be for a maximum term of, for example two years. This is usually a policy for a homeowner who has another policy that would kick in at a later age.

There are also a lot of riders that will be offered to a policy purchaser. They may be: guaranteed renewable policy, non cancelable policy, guaranteed future insurability, inflation protection and waiver of premium.

Inflation Protection

An inflation protection rider will automatically increase the benefit dollar based onsome cost of living index. This protects against the disability payments falling way short of the required payments in the future.

Guaranteed Future Insurability

A rider like this will let the policy holder increase the amount of the policy if the value of the home grows, without having to reapply for the mortgage insurance.

Guaranteed Renewable Policy

This rider assures that the policy will always be able to be renewed (as long as premiums are current, though they may go up.)

Non-Cancelable Policy

This rider renews the policy and also protects the premium from increase.

Waiver of Premium

Once you start collecting a benefit, the premiums are no longer due if you have this rider. It would be a difficult financial burden to have to continue to pay the premiums on the insurance after you have become disabled.

About the Author:

Thank you for your interest in our article.For more information, visit: edmonton best mortgage rates or mortgage insurance quote canada

Get all the information and photos:: http://mortgagewide.info/canada-mortgage-insurance-understanding-riders-on-mortgage-disability-insurance/