Mortgage protection disability insurance (MPBI) is something many families do not consider until it is too late. What would happen to your family and home if you are a car accident or injured at work? What if you became seriously ill and could not work? This is where mortgage Texan disability insurance can help your family keep up with your mortgage payments and protect your home.
Most illnesses are relatively minor and can be treated with medicines or wise advice from your doctor. When these illnesses occur, you rarely miss any work. If you do miss work, it is often for just a day or two. Some illnesses, however, are much more severe.
Having a disability plan is smart
Serious illnesses caused by disease or infection can cause you to be unable to work for an extended period. If you are not working, you are not getting paid. If you’re not getting paid, you can’t make your mortgage payments. This is where mortgage protection disability insurance can provide an important financial safety net for you, your family, and your home.
Accidents are another reason you would not be able to work. Accidents can occur at home, at work, and while performing daily activities like driving, shopping, and participating in recreational activities. It could be a broken toe that would be a minor inconvenience, or it could be a broken spine that would render you unable to work for many months.
Why should I consider disability insurance?
Nearly half of all home foreclosures are caused by medical problems and injuries that result in disability. Social Security Administration statistics show that one in four of all twenty-year-olds (data from 2013) will become disabled before they reach retirement age. Disability is a significant threat to your income producing ability and your ability to make mortgage payments and stay in your home.
By having MPBI in place, your home and family will be financially protected against illness or injury. By having a mortgage protection life insurance plan in place, your home and family will be financially protected against death and the loss of income.
Do I need mortgage protection disability insurance?
It depends. If you have no short-term disability or long-term disability plan with your current employer, investing in disability insurance that you own and control is a wise idea.
Even if you have disability coverage through work, the average worker changes employers every 4 to 6 years, and there is no guarantee you will have disability protection with your next employer. If you’re laid off or terminated by your employer, you will have no disability insurance protection while you are searching for a new job. This will place your family and home at risk financially.
But, I already have disability insurance through my employer
Some people are lucky enough to work for companies that offer short-term and long-term disability as part of their benefits package. This is a wonderful benefit to have, but you need to be aware of your coverage amounts. Most employer provided disability plans replace only 60% of your current income. That means each month you will have a significant financial shortage in your budget.
Do I have to buy disability insurance with my mortgage protection policy?
No, however, it is often cheaper to do so. Many of our insurance carriers allow us to bundle a disability insurance policy within a mortgage protection insurance policy. Because we are bundling policies, the mortgage protection disability insurance is less expensive than if you were to purchase a separate policy.
Is there any reason I shouldn’t bundle my disability insurance with my mortgage protection?
By having a separate mortgage protection life insurance policy, and a separate mortgage protection disability policy, it makes it easier to make changes or cancel a policy in the future. If three years from now you decide you no longer need the disability insurance, you can cancel just that policy and not impact your mortgage Texan life insurance policy.
What are the coverage limits for mortgage protection disability policies?
Depending on the insurance company, you can get up to $1,500 to $1,800 a month in disability coverage built into a mortgage protection insurance policy. If you buy a separate disability policy, the coverage limits go much higher.
What is the waiting period before I could get paid my disability benefits?
Depending on the insurance company, your waiting period will be 30, 60, or 90 days from the time of your illness or injury. Most insurance plans allow you to choose the waiting period length. A 30 day waiting period will be more costly than a 90 day waiting period. With the help of your insurance agent, you can determine what waiting period will be appropriate for you and your situation.
If you are working in a high-risk industry such as construction, a shorter waiting period may be appropriate. If you are an accountant and work in a safe work environment, a longer waiting period may be appropriate.
If you have enough money in the bank to cover your expenses for 90 days, then going with a 90 day waiting period will save you money in insurance premiums. If your bank account is low, a 30 day waiting period would be more appropriate.
How long did the disability benefits last?
Depending on the insurance company, the coverage period will last for 12, 18, or 24 months. Insurance companies will let you decide the coverage length you want. A 12-month coverage period will be costlier than 24-month coverage. With the help of your insurance agent, you can determine what coverage amount will be most appropriate for you and your situation.