Mortgage Life Insurance
If you are buying a home, condominium or townhouse and you have a mortgage on it, you will want to get mortgage life insurance. Mortgage life insurance is a type of insurance policy that will pay off the remaining balance on your mortgage if you die before it is paid in full. Mortgage life insurance is normally available in the form of decreasing term insurance. As the amount of your mortgage balance decreases due to you making regular monthly payments, the value on your insurance policy decreases as well.
If you already have life insurance you can still buy mortgage life insurance, specifically to cover the balance of your mortgage. This will allow your family to remain in the home without the need to continue the mortgage payments if you pass away. It is just one more way to provide for your family in the event of your death. Mortgage life insurance is really very affordable.
The way that mortgage life insurance works is that the benefit proceeds will go directly to the lender to pay off the remaining balance of your mortgage loan when you die having a mortgage balance left on the home. The length of mortgage life insurance policies last as long as the mortgage does. So for instance, if you buy a new home with a 30 year mortgage, you should buy a mortgage policy that will last 30 years too. If you have a 15 year mortgage, a 15 year mortgage life insurance is the length of the term for the insurance should be, etc.
There are several different plans for mortgage life insurances that are available. The most popular are the decreasing term mortgage protection plans. Another option is to purchase enough level term life insurance to be used to pay off your mortgage if you were to die before your mortgage is paid off.
Some lenders offer decreasing term life insurance for mortgage protection that will give the protection you need for up to 30 years. You can pay your premiums for this kind of mortgage life insurance with your monthly mortgage payment. This is a very popular option for most home owners and very convenient. You don’t even think about making the payments when you pay the premiums with your house payment each month. The premiums stay the same each year. However, the face value of the policy will decrease each year to remain in line with your mortgage balance.
A level term mortgage life insurance plan is also a great option. You can find these kinds of policies for 10, 15, 20 or 30 years. With the level term life insurance your premiums will stay the same and the face value on your policy will stay the same. One reason for buying level term mortgage insurance is so that as the mortgage gets paid down there will be extra funds left over for the family to help provide for their living expenses after your death.
When shopping for mortgage insurance it is a good idea to compare prices, plans and coverage amounts for mortgage life insurance. You should compare the different types of policies and the benefits of each type before you decide which plan is best for your situation and your family. These types of insurance products not only provide the financial protection for your family to remain in the home, but also to continue their current lifestyle if you were to pass away suddenly. There are various websites online that you can go to compare the different plans and policies. You can also compare the terms and conditions online. You can buy the insurance through your lender or one of the mortgage insurance providers online.