Family Finance Help

There exist merely two mortgage insurance products. One product is mortgage life insurance, which guarantees that your mortgage will be paid if you pass on. You can choose decreasing or fixed term, depending on the kind of loan you have. Disability mortgage insurance guarantees the payment of the mortgage bill during a period of disability when you have no salary.

But in addition to these plain vanilla variety of mortgage insurance products, homeowners have some choices about the full nature of their policy.

First make sure you understand whether you have picked a partial disability policy, with a predefined bebefit or a residual policy, that has an amount based on current salary.

A home owner could also choose a short term disability benefit whereby the policy would only pay benefits for a shorter, specified length of time, such as two years. This is usually the kind for someone who has another policy that would cover his expenses in at a later age.

There are also a number of riders that will be shown to a policy purchaser. Some of the riders usually offered are guaranteed future insurability, non cancelable policy, waiver of premium, inflation protection and guaranteed renewable policy.

Inflation Protection

An inflation protection rider will automatically increase the benefit dollar based ona cost of living index. A rider such as this prevents your disability payment from becoming inadequate should inflation heat up.

Guaranteed Future Insurability

The value of your residence may increase because market forces or improvements you have made, but if you buy this rider, you will be guaranteed that you can increase the policy to cover it, without re-applying.

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 be increased.)

Non-Cancelable Policy

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

Waiver of Premium

Another popular rider is one that that allows for the premiums on the policy to be waived when benefits begin. This means that while you are disabled, you do not have to continue paying the premiums on your mortgage disability policy.