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Paying Your Mortgage When Your Income Discontinues

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Paying Your Mortgage When Your Income Discontinues

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What if you should suffer a disability before your home is paid off? Should your mortgage insurance also have a disability provision?

Mortgage Protection; Disability and Risk. 
For many Americans, their home represents both security and peace of mind. It is typically both their greatest financial investment and their greatest asset (besides their retirement plan). An unpaid mortgage may be one of the most overwhelming financial threats a family can face. 

Whether this comes from the passing of a primary earner in the home or high medical bills resulting from some disability that prevents them from working, the question is would your family be able to stay in their home? 

In addition to paying your mortgage after a primary earner passes a way, or a disability brings high medical bills along with a loss of income during their recovery phase, protecting your home means preserving important community and neighborhood connections with:

1. Friends
2. Schools 
3. Church 
4. Clubs 
5. Relatives

Death or disability and its recovery can be emotionally devastating. It should not have to also be financially devastating. 

It makes good sense to protect your family against the loss of their home, in the event that the main breadwinner dies before the home is paid for. You can have either a term life insurance policy, with a term for the length of your mortgage or some form of permanent insurance plan with riders or other features that can be converted or used for retirement purposes after the need for mortgage protection has passed. 

But here's the question that is not often asked. What if you should suffer a disability before your home is paid off? Should your mortgage insurance also have a disability provision? 

  • One that pays you an income so you will know exactly how much money you are going to receive to help pay for uncovered medical expenses. 
  • One with benefits that are payable in addition to any other existing coverage. 

If you suffer a disability and don't die, but have to spend a long time to recover, wouldn't the loss of income while not working and the extra expenses of medical care pose just as much of a risk of losing your home as dying?

So having a mortgage plan with a disability provision might protect you not only if you die, but if you live, it can have provisions like optional hospital indemnity benefits to provide a daily benefit when you are hospitalized to help pay ongoing lifestyle expenses. Or a return of premium benefits, so if you suffer a covered disability, or die while this coverage is in force, your family gets all the premiums paid, less any benefits paid or do, of course. Then these premiums paid are returned to the family. 

So what are the questions you should ask? 

  • What are your largest assets? 
  • What is your greatest debt?

How would you keep up with the regular monthly bills (mortgage payments, utilities, etc) if you suffered a disability and you were unable to work for a period of time? How would you cover all of the unexpected costs associated with the disability and still keep up with your mortgage payments? Talk to us today because when you take the risk and lose..... your family pays!