Disability insurance can cover some or all of one’s salary in case one is able to work. Some states provide disability insurance as part of a set of programs like unemployment insurance and workers compensation insurance. The concept is similar to unemployment insurance in that if your salary is cut off, in this case because you cannot work, not because you have lost your job, you will still receive an income.
Some policies cover illnesses related to the job, but many are for any illness or injury that prevents you from working. Disability insurance is frequently a benefit offered by employers at a low rate since it is part of a group package, and employees always have the right to subscribe to more if they want to.
Disability insurance normallyusually only replaces some of one’s full income, many times not more than half. This may not seem enough to a lot of people, who today are paying half of their salaries just to make their mortgage payments. To protect what is probably your major asset, you may want to make sure you can keep up with your mortgage payments if you are sick for a while.
Your mortgage disability insurance is critical in this situation. If you have mortgage disability insurance, your mortgage will be paid via the policy, regardless of another disability policy you may have.
If you have mortgage life insurance, it will take care of your family’s obligation to pay off the home loan in the case of your death. But a disability can create a great deal of havoc, and life insurance will of course not help here. Would the mortgage be kept current until you were able to return to work so they don’t have to risk losing your home? A mortgage disability insurance policy would given them enough funds to make the mortgage payments during the period you cannot work.
If need be, and this is probably the case in most households, this insurance can cover both wage earners in a household. If either you or your spouse were disabled, the insurance policy would make the monthly payments so your home would be protected. These payments are done in addition to any other disability insurance you may be receiving.
You have to understand the terms under which you can access the policy; policies differ greatly. Make sure understand and are at ease with all of the terminology, since not all illness will be covered, and there can be waiting periods. Then you can compare the costs of each company with the benefits they offer to find the most cost effective.
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