Any kind of disability is tragic to happen and can change people’s life drastically. People who have bought mortgage plans might have a tough time making their premiums on time and mortgage disability insurance is designed to help with the same. These mortgage insurance plans offer a decent income to pay the premiums are can be bought from the top and popular providers. This article talks about these plans in detail and the different types available in the market.
Know the Plan
A sudden disability can change things quickly and making mortgage payments timely might be quite difficult for the homeowner and their loved ones. At times, the homeowner gets a major disability that badly affects their life and income. Under such scenarios, they have to take care of their treatment as well as essential expenses and the loved ones also have to suffer while making the ends meet. A mortgage disability plan ensures that premiums will be paid on time, in case the insured meet an unfortunate incident and becomes disabled. These plans come with coverage options and partially or fully cover the monthly premium of a plan. Let’s get to know how these plans work and how one can get most of them.
How Do They Work?
These plans are offered by different providers and help the insured keep their mortgage going. Here, they pay a fixed premium every month and the insurer provides a certain income to the insured in case they get disabled in the future. The offered income depends on various factors including the coverage amount they choose while buying a plan. Monthly premiums are highly dependable on the age, coverage amount, health and profession of the buyer. This means monthly premiums with increase along with the age of insured as well as the coverage desired.
Similarly, a comparatively cheap mortgage insurance is offered to the buyers with a good health status and working in a safer environment. Providers are offering mortgage plans are very competitive prices and one can get a cheap plan by shopping around before they buy. Insurance portal providing plans from multiple insurers help the applicants receive more quotes quickly and compare the plan benefits easily. Depending on the benefits offered, they can buy a plan that offers the most for a preferred price.
Pros And Cons
MPI plans have a clear edge over the traditional life insurance and disability insurance applications. Unlike those plans, the applicants don’t need to go through a un underwriting process and chances of not getting a plan is almost nil. This is a big plus for the applicants with a poor health status as they can choose the desired cover to protect their home in case the unexpected happens.
The offered plans determine the monthly premiums based on the health and occupation of the applicants. People who work in a risky environment including but not limited to chemical plants, power plants, coal mines or sea shores as considered to be very likely to meet an injury that may affect their life significantly. Insurers find it riskier to provide mortgage plans to these applicants and offered a plan more expensive than others.
To provide an additional cover and help during specific situations, there are insurance riders offered by the companies. A disability income rider provides a fixed monthly income in case of illness or injury while an accident-only rider helps to pay the premiums in case of getting injured in a covered accident. Other than these, there are some standard MPI riders that an insured can choose from.
Return of Premium
Once the policy term expires, the insurer will provide a refund of total premiums paid, after deducting the application fees.
Under this, the insurer will waive off the premium up to a certain limit, if the inured goes unemployed for a certain period.
The offered rider covers mortgage principal and interests and can be added to a mortgage plan for additional relevant expenses.
Other Options Available
The marketplace offers some more disability insurance options that include:
Long-term disability insurance
Also known as income replacement insurance, these plans provide up to 60 percent of the monthly salary of the insured and help to pay their premiums in they are unable to work for long.
Short-term disability insurance
Better known as a complement to long-term disability, these plans cover the monthly income of the insured for a shorter period and help to make the payments timely.
Supplemental disability insurance
As the name says, these are a supplement to the employer-provided disability insurance and cover up to 60 percent of the monthly income of the insured.