is mortage disability insurance a rip off?

[dooo42]

i'm looking into life and disability insurance for my wife and myself. i was talking to an agent and he did mention mortgage disability insurance but it sounds like a rip off. what you think?

[Sarah in SC]

I agree with you. I wouldn't do business with an agent that suggested it, even.

[Dimsumkid]

I had a family member that bought into this disability insurance. He was under the belief that the house mortgage would be paid off if he died. He had a mortgage and a home equity loan. Neither was covered when he died of cancer, this was considered natural causes. In all, he had 2.5 million of disability insurance from various places, insurance policies, credit cards, etc.

[ziggy29]

Yes. Pretty much ANY kind of "disability" which only pays off a particular debt in case of disability is likely to be an extreme ripoff.

General disability coverage is a necessity for most working folks, but that should be a generic disability policy that replaces lost income if you are unable to work, not merely an overpriced product that pays off one loan (or worse, only pays it down while you are disabled).

[jayc]

I agree with you. Rip off. You had me when you said the agent talked.

[aaronc879]

I would never purchase disability insurance because my expenses are so small it's very easy to self insure. A coworker of mine, however, is very glad he has disability insurance since he has no savings and needs foot surgery. He'll be out of work for 2-3 months and will have all of his monthly expenses paid for in full.

[dgoldenz]

Quote:

Originally Posted by Dimsumkid I had a family member that bought into this disability insurance. He was under the belief that the house mortgage would be paid off if he died. He had a mortgage and a home equity loan. Neither was covered when he died of cancer, this was considered natural causes. In all, he had 2.5 million of disability insurance from various places, insurance policies, credit cards, etc.

Sounds like he had accidental death coverage, not life insurance. There's a reason that AD&D costs about $5/month for $1 million of coverage.

Quote:

Originally Posted by dooo42 i'm looking into life and disability insurance for my wife and myself. i was talking to an agent and he did mention mortgage disability insurance but it sounds like a rip off. what you think?

Disability insurance has a lot of moving parts. Make sure you understand them when buying. The longer the definition of disability, the worse off you will be. More words usually just means more exclusions. Use the help of an independent agent that offers coverage from 10+ companies (there are much less reputable disability than life companies though). Guardian has the best true disability policy around IMO.

Quote:

Originally Posted by aaronc879 I would never purchase disability insurance because my expenses are so small it's very easy to self insure. A coworker of mine, however, is very glad he has disability insurance since he has no savings and needs foot surgery. He'll be out of work for 2-3 months and will have all of his monthly expenses paid for in full.

Unless your disability insurance is through your employer, there is usually a 90-day waiting period for benefits to kick in. You can get a waiting period shorter than that, but the cost is much, much higher.

[Sarah in SC]

And to reiterate, disability insurance (a worthy purchase, indeed) has nothing to do with the scammy mortgage disability insurance question of the OP.