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TERMINOLOGY
Mortgage disability insurance is a type of coverage that makes your monthly payment if you become temporarily or permanently disabled. Most lenders will give you the option of adding the cost of the insurance into your loan price, or you can use an outside source if you find one with a better offer. You must be eligible in order to have disability insurance cover your loan.
Comparing Disability Insurance
There are many pros and cons with mortgage disability insurance. If you have the money to cover the monthly mortgage payment, you may not want to pay the price for coverage. Find out exactly what the insurance costs for each source you explore, and determine if the coverage is suited to your situation.
Choosing a Provider
Your lender probably would not offer the disability coverage if they were not completely confident with the insurance provider. You can still do some research into the company if you are unsure of their reputation.
If you decide to use an outside provider for coverage, your lender may not be able to add the premium into your loan amount due to their lending guidelines. This may or may not increase the amount you have to pay each month, depending on how the insurance company you use structures your premium payment.
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