Is mortgage disability insurance a good idea?

Question

I have 90 day disability at work, but I would like to know my mortgage is covered should I become disabled. I am single and do not have family, so am less worried about life mortgage insurance than disability. But, I don't want to waste money either.

Answer 1

I would get whole life insurance outside of our employers program. Many times there is disability coverage, plus there is a cash value on whole life that can be borrowed against in the future for loans to yourself, like for other real estate purchases. If you're a non-smoker with no DUI's on your record its only like $25 per month. Money well spent!

Answer 2

I used to sell life and disability insurance on loans for 3 years, and while it was a great money maker, I would never get it for myself.
Insurance that is sold to you by a mortgage lender is going to be very over priced and it should be last resort. The fact that you are single and no family makes it even easier to decline that option. I would say that if you are going to be disabled for longer than 90 days, that disability may as well be permanent and you would probably know so within 30 days of being disabled, at which point you should know if good 'ol Uncle Sam will be helping you out, if not, sell the home or get a roommate.
My best advice to you is to consult with a good independent insurance agent about a disability plan and maybe even some life insurance.

Answer 3

1

Answer 4

Well, look at it this way. I've been a homeowner for over 28 years now and have never had mortgage disability insurance. It was a crummy deal when it was offered. And I've never needed it. Most folks can say the same thing.

Here's a tip: Find out how much they charge for it. Put that much aside every month in a separate savings account until you have 3 months worth of mortgage payments in that account. You are now covered until your work disability kicks in, and never need to add anything to the account again! In my case, it took me only 18 months to set that much aside.

Don't waste your money on whole life, it's the worst possible way to buy insurance and a lousy investment vehicle! As you don't have a family, you really don't need it as you already have said.

Answer 5

If you are thinking about disability coverage, you should probably see if you can purchase long term disability coverage through your employer.

Mortgage disability only covers the mortgage payment, and if you become disabled, you'll ALSO need to pay property taxes, utilities, and you might want to eat once in a while, so rather than limiting the payout to mortgage only, you should look for a full long term disability policy.

Also, keep in mind that for long term disabilities, Social Security may kick in, but you might need to fight for a few years to get them to consider you disabled.

Answer 6

Your total financial life is very complicated. Disability is but one part. Life insurance is another part and CAN in certain circumstance be worthwhile for single people to purchase. Accumulating enough savings is another part.

If knowing that you have a good chance of achieving your goals no matter what happens in your life is important to you, then having a plan for a possible disability situation is necessary. Social Security's disability kicks in after 18 months of disability and your can't work in any capacity during that 18 months.

Your best be is to go talk to one or more licensed financial professionals including insurance agents. Talk to as many as you need to until you find one with whom you are comfortable.

Answer 7

Disability insurance is necessary