A mortgage might seem like a simple thing, but it is by no means that. Sure, it is nothing more than a loan that you are paying down when you pay your monthly housing expenses to the bank or lender of your choosing, but it can get much more complicated than that. As you’ve likely discovered with this COVID-19 pandemic, there is such a thing as mortgage disability insurance, which only further complicates the mortgage and everything surrounding it. That being said, a mortgage disability insurance policy is one that covers your ongoing mortgage payment for a specific period of time if you are unable to do so.
The reasons behind not being able to pay the mortgage can vary. Maybe you are disabled due to an injury at work. Maybe you become disabled to a flare-up from an existing injury. Maybe you simply can’t work because of this COVID looming about. Whatever the situation is, these are all viable examples of where this type of disability insurance would come into play.
Understanding How Mortgage Disability Insurance Works
When it comes right down to it, mortgage disability insurance is a fairly simple concept. However, most people are visual learns, and that’s why it’s best to approach this with a story. Say that a lady name Patrica is interested in buying a home. Of course, she can afford to pay for it out of pocket so she has to secure a mortgage from the bank. A loan of sorts that will cover the entire cost of the house. She will then pay back this loan to the bank or lender in monthly increments. Being that Patrica is the sole provider and most of her savings will be covering the down payment, she is worried that if something happens to her or at her job, she won’t be able to keep up with the mortgage payments. In which case, she and her family will likely be evicted.
Well, this is why she also decides to invest in mortgage disability insurance. If Patrica buys a coverage policy from a provider like ProfessionalsCoverage and continues with her premium payments, she’ll have nothing at all to worry about. Just for clarification, say that Patrica gets into a terrible accident five years or more after making the initial down payment on the home. Say that she is injured to the point where she will be out of work for a year or more or potentially forever. As long as Patrica has kept up her mortgage disability insurance payments her coverage will kick in. She’ll immediately begin receiving monthly stipends from the insurance provider.
These stipends might be enough to cover the entire mortgage payment, they might not be. This is something that will be agreed upon when the insurance contract is first negotiated. Simply put, these mortgage disability payments could help Patrica and her family remain in their beautiful home until she is able to get back on her feet or figure out another payment solution.
How Long With Mortgage Disability Insurance Cover You?
This is probably the next thing that you are wondering, and it is a good point to bring up. It really depends on the insurance provider and the terms that are agreed upon at the beginning of the contract, but for the most part, most plans will kick in after an initial waiting period of 60 days. 60 days after the accident, diagnoses, or mishaps, this insurance policy will kick in and start offering coverage. It will usually continue to cover your payments for a maximum of 24 months or 2 years. The plan will pay a maximum monthly benefit along with the disability insurance premium and sales tax for your mortgage. Just remember this is a general theory, as these terms are subject to change depending on the provider.
How Much Does Mortgage Disability Insurance Cost?
This is going to be another one that’s hard to answer right out because it will vary from situation to situation. However, there are several distinctive determining factors that will determine what you end up paying overall for coverage. It might come down to your age at the time the application is filled out. Your mortgage cost along with your previous insurance history can factor in as well. If you even bundle the policy with other plans, you might end up getting a discount. You can clearly see that cost will vary from situation to situation, depending on your age, insurance history, mortgage cost, and whether or not you bundle.
Is There A Max To The Payout?
Yes, there will be a maximum amount of money that the insurance provider will payout. This is something that will be agreed upon when the insurance contract is first negotiated and signed. However, most companies usually offer anywhere from $3,000 to $3,500 per month. So, if you need to do some quick figuring, you can use these numbers as a guideline.
Who Is Eligible For Mortgage Disability Insurance?
If you currently reside in Canada and are between the ages of 18 to 64 with a minimum of 20 hours a week under your belt, you can apply for this type of coverage. This doesn’t necessarily mean that you’ll be granted coverage. It just means that you can apply, and you’ll likely receive coverage before someone who does not meet these standards.
Are Their Health Restrictions?
Unfortunately, all individuals are not currently healthy, and this is just one of the biggest reasons that they seek out this coverage in the first place. What kind of a role does this play and how big? Well, this might depend on your provider, but just about every application for coverage will have health-related questions about your current state of health. Just because you have failing health or are more likely to require coverage than someone else, it doesn’t necessarily mean that you’ll automatically be disqualified for coverage.
Where To Get Coverage?
You can get coverage from your friendly local Canadian insurance provider, ProfessionalsCoverage. They have agents standing by around the clock ready to assist and answer any questions you have. All you have to do is give them a call or surf on over to their website. There are also other providers available in the area if needed, but ProfessionalsCoverage should without a doubt be your go-to first option.
Types of Disability Insurance we offer
- Long-Term Disability Insurance (LTD)
- Short-Term Disability Insurance
- Key Person Disability Insurance
- Self Employed Disability Insurance
- Mortgage Disability Insurance
- Temporary Disability Insurance
- Supplemental Disability Insurance
Other Disability Insurance Resources that you can read
- Are Canadian Disability Insurance Premiums Tax-Deductible?
- Will My Long-Term Disability Income Be Taxable?
- Dealing With Elimination Periods For Short And Long-Term Disability Insurance
- Pregnancy And Disability Insurance
- Who Pays For Disability Insurance?
- Why Employers Offer Disability Insurance
- Maternity Leave And Disability Insurance Benefits
- How Long Do Long-Term Disability Benefits Pay?
- How Much Does Long-Term Disability Insurance Cost?
- Is Disability Insurance Worth It?
- How Much Disability Insurance Should I Get?
- What Does Disability Insurance Cover?
- What To Look For In Disability Insurance?
- Do I Need Disability Insurance After I Retire?
- Does Disability Insurance Cover Pre-Existing Conditions?
- How Does Disability Insurance Work?
- How Long Does Long Term Disability Insurance Pay?
- Is Wage Loss Insurance The Same As Short Term Disability?
- When Does Long Term Disability Insurance Start?
- Can You Buy Your Own Short Term Disability Insurance?
- Can You Get Disability Insurance If You Are Unemployed?
- Can I Buy My Own Short-Term Disability Insurance?
- Can You Get Individual Short Term Disability Insurance?
- Are Credit Cardholders Insured By Disability Insurance Plans?