Compare and Save on Life Insurance:
If you are over the age of 50 and you still owe on your home, you might want to seriously consider purchasing mortgage life insurance. With the help of mortgage life insurance, you can rest easy in knowing that your mortgage loan will be paid off in full if you pass away before your mortgage is fully repaid. As a result, your loved ones will not have to worry about the possibility of being stuck with paying off your mortgage debt after your passing.
Although there are certainly many benefits associated with mortgage life insurance, there are a few drawbacks associated with having this type of coverage. The primary drawback is the fact that your premium costs remain the same throughout the lifetime of the policy. Yet, the value of the policy goes down every year as you slowly pay down your mortgage loan. For this reason, some people prefer to simply purchase a term life insurance policy that will stay in place until after the mortgage loan is paid off. In this way, they can be sure the policy will provide enough money to pay off the mortgage loan and the total value of the policy does not decrease over time.
A much better deal is Term Life Insurance - the premiums stay the same, but the policy value also stays the same.
Despite the potential disadvantages associated with mortgage life insurance, there are some advantages to having this type of policy in place. In addition to bringing you peace of mind in knowing that your mortgage loan will be paid off when you pass away, it also ensures your life insurance funds are spent in a responsible manner. If your beneficiary is an irresponsible spouse, for example, you might be concerned that the benefits from a term life insurance policy would be spent wastefully without concern for paying on the home you have left behind. By having a mortgage life insurance policy in place, you can be certain the funds will go toward paying off the mortgage loan so your dependents will have a place to live.
Another benefit to obtaining a mortgage life insurance policy is the fact that these policies generally do not require you to undergo a medical examination. This is partially due to the fact that these policies usually are not of a significant value, but is also because the value of the policy decreases over time. Therefore, issuing one of these policies results in relatively little risk to the insurance company. At the same time, obtaining one of these policies can go a long way toward providing you with peace of mind.
Regardless of your age, obtaining a mortgage life insurance policy could be a good move if you have taken out a mortgage loan. In order to determine if this is the right type of policy for you, however, you need to examine your personal situation as well as the needs of your beneficiaries. This way, you can better determine if a mortgage loan is necessary or if other types of life insurance might better provide you with the coverage you need.
Sometimes mortgage life insurance is confused with PMI, but they are different.