Jul
4
Mortgage Insurance Quote Canada: Deciding Upon Which Mortgage Disability Riders are Right for You
July 4, 2009 | Leave a Comment
There are merely two mortgage insurance products. There is mortgage life insurance to guarantee that your mortgage will be paid on the event of your death. This may be either decreasing term or fixed term, it depends on the nature of your mortgage. Disability mortgage insurance guarantees the payment of the mortgage bill during a period of disability when there is 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 are clear on whether your broker is talking about 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 be for 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.
Besides the kinds of insurance a homeowner can pick, there are number of optional features, or riders, that can be written onto a policy. These include inflation protection, guaranteed future insurability, guaranteed renewable policy, non cancelable policy or waiver of premium.
Inflation Protection
An inflation protection rider will automatically 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 pick up.
Guaranteed Future Insurability
If the value of the home grows, whether through normal appreciation or due to improvements, the value of the policy can grow with it, without any requirement for a new application.
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 go up.)
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 may not be raised.
Waiver of Premium
When you are collecting benefits under the policy, you will not have to continue to pay the premiums, if you choose this rider. It would be a difficult financial load to have to continue to pay the premiums on the policy after you have become disabled.
Comments
You must be logged in to post a comment.