If you're taking the first steps toward buying a home, you may be concerned about how you'll make your mortgage payments if something were to happen to your income. If you become unemployed or injured and are unable to work, keeping your home and continuing to make regular payments may present a serious challenge.

Mortgage Protection Insurance

Real estate agents, lenders and insurance providers know that this is a serious concern for potential home buyers. As a result, you may be encouraged to purchase mortgage protection insurance or a disability insurance plan that can cover your mortgage payments if you become sick or unable to work.

This kind of mortgage payment protection plan can be very beneficial and provide potential buyers with confidence and peace of mind. If you think disability insurance and mortgage insurance are right for you, speak to an insurance agent to discuss the details.

But there are a few things to keep in mind as you begin your investigation. First, you may be covered by a disability insurance plan through another source. Find out how this coverage will affect the payments you receive from your mortgage protection insurance provider. For instance, some mortgage protection insurance policies won't make payments if your alternative disability insurance pays 50 percent or more of your previous earnings.

Disability Insurance and Mortgage Insurance

Most disability insurance payments cover only a certain percentage of previous income--usually between 50 and 70 percent. This limit is often put in place to provide an incentive for the disabled person to return to work as soon as possible. Buying more disability insurance coverage usually won't increase your payments. Since you won't benefit from buying both, choose between regular disability insurance and mortgage insurance; regular disability insurance can often provide better coverage at a lower price.

As with any form of insurance, understand the terms before signing a new policy. Find out the date your coverage will begin, the length of time it will take for payments to be issued and the full details of what will--and won't--be covered by your premium payments.