avoid-foreclosureOne illness or injury is often all it takes for a family to lose their home. If a breadwinner can’t work, the mortgage can’t be paid, and foreclosure is a likely result – unless the homeowner has individual disability insurance.

Homeowners are vulnerable.

Real estate sales growing since 2014, but not everyone who buys a home gets to keep it. More than half of all foreclosures are due to financial problems with medical causes. In other words, medical debt is a serious threat to homeownership.

Health insurance helps, but it’s often not enough. The CDC reports that close to half of Americans with employer-based insurance have a high deductible plan – a huge increase since 2007, when it was less than 15 percent. This means many people may pay less in premiums every month, but when an illness or injury occurs, they’re hit with high out-of-pocket expenses.

A report called Being Seriously Ill in America Today found that around one-third of insured Americans have trouble paying hospital bills after a serious illness.

Even people with savings may not be as safe as they think. When an illness or injury strikes, it often does so with a double punch. First, people are often forced to stop working. As a result, they can’t earn the income they rely on. At the same time, they’re hit with medical bills. It’s easy to see how this common scenario could quickly result in depleted savings, an unpaid mortgage and foreclosure.

There’s a solution for most working people.

Foreclosure due to medical debt is a serious risk, but it’s one that can be mitigated with the right individual disability insurance policy.

Some clients may turn down coverage because they think it’s too expensive. They decide to accept the foreclosure risk because they don’t see another option. What they may not know, however, is that there are multiple levels of coverage. People who can’t afford maximum disability insurance coverage still have options.

  • Good coverage provides coverage for the mortgage payment.
  • Better coverage provides coverage for the mortgage payment along with other crucial bills, like utilities and car payments.
  • Best coverage provides up to 82 percent of take-home pay.

Help your clients find the right level.

By finding the option that’s right for your clients, you can help them keep their home after an illness or injury – without breaking the bank now.

To get started, watch this video on income protection options.

Then download the Income Protection Options worksheet. You’ll need to know a little bit about your clients, including how much they spend on their mortgage and other essential bills. Once you have this information, complete the worksheet to create three levels of protection. Show them to your clients, who can pick the option that best fits their needs and budget constraints.

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