Family Finance Help

There are not a lot of variations when it comes to mortgage insurance products. There is mortgage life insurance to guarantee that your home loan will be paid in case of your death. You can pick decreasing or fixed term, depending on the kind of loan you have. Disability mortgage insurance means the payment of the mortgage bill during a period of disability when you have no salary.

Once the kind of insurance is decided upon, the homeowner has to make some choices regarding optional products.

In discussing a mortgage liability insurance policy, be sure you understand 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 cover a maximum term of, for example two years. If you have retirement funds and planned on early retirement, you may not have to have disability insurance to cover your mortgage when you begin that income stream.

In addition to picking a policy, the buyer will have to choose between a choice of riders available. They are: guaranteed renewable policy, non cancelable policy, guaranteed future insurability, inflation protection or waiver of premium.

Inflation Protection

An inflation protection rider will periodically increase the benefit amount based ona cost of living index. A rider like as this prevents your disability payment from being too little should inflation heat up.

Guaranteed Future Insurability

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

Guaranteed Renewable Policy

You will always have the right to renew the insurance, however the insurer reserves the right to increase premiums.

Non-Cancelable Policy

A policy that is non cancelable carries a rider that fixes its renewability, and, as long as the premiums are paid, the premiums cannot be raised.

Waiver of Premium

When have started collecting benefits under the policy, you will not have to go on paying the premiums, if you pick this rider. This prevents any additional expenses during the length of your disability.