Mortgage Life & Disability

Your Home is probably the single, most important investment you’ll ever make in your lifetime. A home is where you raise a family and build a foundation for the future.

And while most of us realize the importance of homeowner’s insurance to protect against the loss of our homes, we often overlook other ways we can lose our homes… death or disability. Either event can stop earned income needed to make the mortgage payments.

With your interest in mind, we at The Mortgage Group decided to offer Life and Disability Income programs to help you protect yourself and/or your loved ones against losing your home if ever these eventualities ever occur. 

Protection Against Premature Death

You can protect your loved ones from losing their home in the event of premature death thru the proper use of life insurance.

You have the option of protecting them by using two particular life insurance plans, Term and Permanent Life Insurance.

Using Permanent Life Insurance can:

§       Reduce amortization period by a number of year on a 30-Year mortgage[1]

§       Save you thousands of dollars in mortgage interest payments

Which simply means that…

• Your mortgage can be paid off sooner, and
• Your total interest payments are greatly reduced

Or use it for Other Living Benefits[2] as permanent life insurance accumulate policy values that:

• Can supplement your retirement income, or
• Provides you a convenient source of funds for your children’s education, or
• Is readily available for emergency or opportunities

We can assist you in designing and obtaining a life insurance policy that suits your specific situation and fits your pocket book.

Remember:

“Your Home Is Just a House If It Can Be Taken Away from Your Family”.

Protection Against Disability

When you’re healthy and working, it’s hard to imagine being disabled by illness or injury. But it can happen.

A serious disability can halt the income that is used to pay your monthly mortgage loan. And the risks of becoming disabled may be greater than you think.

In fact, two studies revealed that nearly 50 percent of bankruptcies and mortgage foreclosures are caused by disability.

• A study done by Harvard University revealed that in a review of bankruptcy filings disabling medical problems led to nearly half of the 1.458 million bankruptcy filings - based on 2001 filings.
• A study by the Housing and Home Finance Agency of the U.S. Government found that 48 percent of home foreclosures were the result of disability while only 3 percent of all foreclosures resulted from the death of a homeowner. This was from a 1998 study which is reflective of most years, on average.

For years, leading financial advisors have recommended a core of protection as part of sound financial planning. The disability insurance component is often overlooked.

Here are some other disability statistics:

1. Approximately one out of seven people who are between the ages 35–65 can expect to become disabled for five years or longer.
2. Almost 30 percent of the people who are between the ages 35 and 65 will experience a disability that lasts at least 90 days during their working careers.
3. The average disability absence is 2 and a half years.[3]
4. If you put away 10 percent of your income each year, then simple arithmetic says that one year of being totally disabled could wipe out the 10 years of principal that you put into your savings.
5. More than 80% of working Americans don’t have disability income insurance or aren’t covered adequately.4[4]
6. About 110 million Americans do not have long term disability insurance.

The chart below illustrates that an individual’s chances of disability are 2 to 3 times greater than death during their working years.[5]

What would happen if your paychecks suddenly stopped because you were too sick or injured to work? What if you couldn’t work for months – or years?

You’d still have to pay all your monthly bills, including food, utilities, house and car payments. Add in things like tuition and retirement funding, and it’s easy to see how savings could quickly disappear.

Unfortunately, you can’t rely on other income sources like Social Security to protect you. In many cases, they don’t apply -- or aren’t enough.

Think about this:

1. Social Security disability payments are limited to disabilities expected to last at least 12 months or end in death. To qualify, you must be unable to engage in any type of work.
2. Personal Savings can best be used to build a comfortable future. Add up your monthly bills, then multiply by 12 and you can see how fast even substantial savings can be depleted by unexpected illness or injury.
3. Long-Term Disability Insurance offered through your employer is a start. But workplace disability benefits often times cover only about 50% of your income. Can your family survive on half of a paycheck?

Here are the other reasons why Group Long-Term Disability (LTD) may not be enough:

1. Group LTD usually covers only a portion of an employee’s compensation
2. LTD benefits are generally taxable if the employer pays the premiums
3. Many plans don’t cover bonus or incentive compensation
4. There is often a maximum monthly cap and, as a result, an employee's monthly after-tax income during a disability may drop by 50% or more!

Plan ahead to help protect your lifestyle and your home.

Let us assist you design a Disability Income Insurance policy that:

1. Provide funds to meet your mortgage loan responsibilities should you become disabled.
2. Can be customized to fit your particular situation and budget
3. Help you retain independence and dignity without burdening others
4. Help keep your financial dreams and goals for the future intact.

For additional information on Life & Disability Income Insurance, contact us.