Business insurance quotes

Mortgage Credit Insurance

Mortgage credit insurance is designed to provide protection for homeowners who experience serious disabilities, injuries or death. The insurance helps to supplement existing life and disability policies and ensures that mortgage payments will continue to be made in the event that a homeowner becomes injured or disabled. In the event of a homeowner’s death, the insurance may completely pay off the mortgage principal that is still owed.

Mortgage credit insurance is designed to decrease the number of delinquencies on mortgage payments and is often included in the monthly mortgage payment. When you first purchase your home, your lender may recommend this insurance for added protection against certain disabilities or death. In the event that a homeowner dies while still owing on the mortgage, the insurance will pay the remaining balance, protecting the deceased’s family from losing the home. You should note that the premiums for mortgage credit insurance vary greatly from lender to lender and may vary depending on the total amount of your mortgage, your age and any pre-existing conditions that you may have. In some cases, mortgage credit insurance may be denied completely due to certain health problems.

The cost varies greatly and is normally based on the mortgage total using a per $1,000 rate. Note that while the premiums may not change for the life of your mortgage, the payout on mortgage credit insurance will decrease as your mortgage principal decreases because it is specifically designed to cover your mortgage payments when you cannot. If a homeowner dies then the bank that holds the mortgage will become the beneficiary unlike typical life insurance plans where family members are typically chosen as beneficiaries. Mortgage credit insurance is designed to provide protection for the bank that holds the mortgage as opposed to the actual insured.

Some feel that mortgage credit insurance is simply not worth the cost. There are many other ways to protect yourself and your family in the event that you cannot make your mortgage payments. A term life policy can be designed to remain in effect until your mortgage is paid off. This is normally twenty to thirty years. Term life policies provide a much lower cost solution for paying off your mortgage in the event of unforeseen circumstances. Universal life insurance policies can also help to protect you in the event of death or disability. Universal or whole life policies will pay your beneficiaries who can then use a portion of the benefit to pay off the remaining mortgage on your home. These policies will also continue to pay your heirs even if your mortgage is paid in full upon your death, unlike credit mortgage insurance that discontinues the moment your home is paid off. Many choose whole life and universal policies in order to provide financial support for settling their estate upon their death.

Credit life insurance is also a good choice for those who want to protect themselves against foreclosure in the event of disability. These policies are designed to continue payments on the mortgage loan and protect the insured against chronic illness and other disabilities that leave them unable to work for a specified amount of time. You should be careful when purchasing credit disability however as there are different types. The insurance provided by most major credit cards will only cover payments on that specific credit card. You will still need additional coverage in order to keep your mortgage payments caught up while you are disabled. This is where most consumers choose mortgage credit insurance. While credit life insurance will keep credit card payments current, mortgage credit insurance will ensure that mortgage payments are kept current.

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