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Does Homeowners Insurance Cover Your Mortgage if You Become Sick?

by Don Rafner

If you take out a mortgage loan, you'll need homeowners insurance. Your lender won't loan you mortgage dollars if you don't take out a policy. Don't think, though, that your homeowners insurance policy will help you keep your home if you suddenly fall ill, can't work and can no longer afford your mortgage payments. Homeowners insurance doesn't work that way.

Covered

Homeowners insurance is a useful tool. If your home is damaged or destroyed in a hurricane, lightning strike or hail storm, homeowners insurance will provide you the money you need to rebuild. Homeowners insurance also provides you with a financial payout if a burglar breaks into your home and steals such valuables as your jewelry or electronics. It will even provide financial protection if someone is injured on your property.

Not Covered

Homeowners insurance, though, does not cover your mortgage payments if you can no longer make them for any reason. If you become sick and can no longer make your payments each month, your homeowners insurance will not provide you the money you need to make these payments. There are other types of insurance, though, that will help you cover the costs of mortgage payments should you become ill.

Disability and Critical Illness Insurance

One way to cover your mortgage payments should you become ill is to invest in critical illness insurance. This payment generally provides you with a cash payment if you suffer one of a series of critical illnesses listed in your policy. These illnesses will vary by policy, but examples might include heart attack, cancer, stroke, Alzheimer's disease and kidney failure. Disability insurance, which you might be able to get through your employer, provides you with a portion of your salary should you become injured or ill and are unable to work. This portion of your salary might help you pay your mortgage bills.

Mortgage Protection Insurance

You can also purchase mortgage protection insurance, often from your existing mortgage lender. This insurance would cover your mortgage payments if you can no longer work, and pays off your mortgage if you should die. The cost of this insurance varies according to such factors as your age, health and the amount of your mortgage loan.

About the Author

Don Rafner has been writing professionally since 1992, with work published in "The Washington Post," "Chicago Tribune," "Phoenix Magazine" and several trade magazines. He is also the managing editor of "Midwest Real Estate News." He specializes in writing about mortgage lending, personal finance, business and real-estate topics. He holds a Bachelor of Arts in journalism from the University of Illinois.

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