Accident and sickness is an insurance policy that will pay your monthly mortgage costs or a percentage of your income should you have to take time off work due to illness or injury. The amount that an insurance company will cover you for is worked out in one of two ways. The most common form of accident and sickness cover is known as Mortgage Protection or Mortgage Payment Protection and will cover you for the monthly cost of your mortgage and any related costs. The other type of cover offered by some insurance companies is known as Income Protector and allows an individual to cover up to 65% of their gross earnings rather than taking their mortgage and related costs in to account. The criteria and rules for both plans are basically the same the only difference between the two is how the monthly benefit is worked out.
Generally, an accident and sickness plan does not have a qualifying period. So, the cover does not have to have been in force for a period of time before you can make a claim. However, at best you have to have been off due to illness or injury for a minimum of 30 days before you can make a claim. The benefit is then paid back from day one of being off work. So in effect accident and sickness cover is always paid in arrears, it can be looked at that one month premiums pays for the previous months benefits. For example, should you be off work for 30 days you can put your claim in anytime and it will pay 30 days (1 months) benefit from day 31. This is referred to by insurers as 30 days back to day one.
The deferred period of 30 days can be extended to 60 days back to day 30 or some companies will also offer 90 days back to day 60. This can be favourable for those individuals that may need to reduce the cost of their accident and sickness cover. However, the saving on the monthly premium is minimal and there are further disadvantages to extending the deferred period. For example, for a 60 day back to day 30 plan the insured cannot put in a claim until day 61 and then the benefit will only pay from day 30. So in effect you are receiving no benefit for the first 30 days off work. Additionally, the insured needs to be off work for the whole of the 60 days before being able to put in a claim. Similarly, 90 days back to day 60 follows the same principal in that the insured will have to be off for 90 days or more and the plan will only pay from day 60.
In conclusion on most occasions before you can make a claim you will be required to have been absent from work due to sickness or injury for the minimum number of days of your chosen deferred period, be that 30, 60 or 90 days.
Accident and sickness Mortgage Insurance Vs Mortgage Life Insurance
Today hearing about mortgage crash is very common and tons of people around the globe are losing their house due to nonpayment of their mortgages. Well, if you do not wish to lose your house and want to be able to pay your installments even in the worst of the cases then there are 2 insurance options that can help you surpass such circumstances: Mortgage life insurance and Accident and sickness Mortgage Insurance. These insurance plans will safeguard you against the mortgage payments and you will not have to worry about making the payments if you fall sick or lose your source of income.
The Difference between Accident and sickness Mortgage Insurance and Mortgage Life Insurance
These insurance types come with similar kind of policies, components, plans. The major difference lies in what they cover you for. Mortgage life insurance protects you against losing your home in case of your death whereas accident and sickness insurance covers your mortgage if you lose your job not because of your fault. For instance; if you are dismissed from your job because of any loss that has occurred to the company then you qualify for accident and sickness mortgage insurance
Benefits of Mortgage Life Insurance
The main advantage of having a mortgage life insurance is that you need not to undergo a medical test to justify your qualification which is dissimilar to other life insurance covers. Also it is a good alternative to your standard life insurance policy because it covers you against your life as well as your mortgage loan. This policy also comes with a return of premium. In its return premium scheme you will paid back all your premium value if you are alive and your mortgage is paid off completely. This coverage also acts as a secondary life protection cover.
Benefits of Accident and sickness Mortgage Insurance
Accident and sickness mortgage insurance is also referred as layoff protection as you do not need a house to enjoy its benefits. The conditions for enjoying the benefits are same as that enjoyed by the state accident and sickness coverage. As the state cover is lower than $400 a week, many people require a little extra to suit their needs.
You can also add the job loss protection insurance policy i.e. accident, sickness and accident and sickness coverage that protects to against the unanticipated circumstances where in you lose your primary source of income when you meet with an accident or acquire any kind of sickness. This cover will ensure that even when you are not able to earn your mortgage installments or in some case utility bills as well are paid off.
Accident and sickness mortgage insurance comes under mortgage life insurance and therefore choosing mortgage insurance allows you to enjoy benefits of the former. With this option not only you will be protected against accident and sickness but also your family will not have to worry about the pending mortgage installments in case you die. You will secure them financially before leaving and they will not have to leave their house and move out.
