Mortgage life insurance

Submitted by carol on Wed, 01/21/2009 - 12:02
If you have mortgaged your home, you obviously do not want to lose it and would like to pay for it by all means. Mortgage life insurance simply helps you to pay off your mortgage in the event of your death during the time when your mortgage is not fully paid. Your house is a big investment and protecting your family and home is really very important for you. So if your home is mortgaged and in the unfortunate event of your death, the mortgage still needs to be paid if it has not been paid fully. This is where mortgage life insurance may be of help. A mortgage term life insurance assures death benefits to your family members in the event of your death. These funds can then be used by them to pay off your loan. The features of mortgage life insurance would include the following:
  • The mortgage life insurance coverage can be chosen by you keeping in mind your mortgage balance.
  • This coverage is available to you for a term of 15 years and 30 years.
  • The insurance amount is level for the first 5 years and then gradually there is an annual decrease towards the beginning of each policy year. The minimum amount of decrease is 20% of the original face value.
  • Life long coverage is also available. If you need it, you may simply convert to a permanent policy, no matter which state you are in or what your health status is.
  • The premiums for mortgage life insurance can be paid annually, semi-annually, quarterly as well as monthly.
Today it makes sense to purchase mortgage life insurance equal to the amount you have taken as mortgage loan. The latest trend is to buy a return of premium policy for a mortgage term life insurance, the reason being that the rate for traditional mortgage life insurance is not as competitive as most of the term rates. The most affordable policy, the level premium, level benefit term policy can be bought for a period of 30 years, 25 years and 20 years etc. There is no decrease in the policy amount and the premiums can also be guaranteed for a full time period.
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