Why Get Mortgage Life Insurance?
A homeowner purchases a mortgage life insurance policy so that in the event of their death, the remainder of the mortgage is paid off. This is very useful to have because what if the homeowner is killed in an accidental death and the home then is foreclosed. It makes sense to protect those you love by ensuring your mortgage will be paid in full in case of your death.
It is a good idea to take an amount in mortgage life insurance that equals that of the original loan if possible, some companies will only offer what is owed, and depending on what you put down, it can vary. In addition, the mortgage life insurance also protects you in the even you being disabled and can no longer work and therefore cannot pay the mortgage. Having the mortgage life insurance certainly gives you peace of mind knowing that if something happened to you, that your family could continue living in the same house.
Another benefit to the mortgage life insurance is the underwriting is very easy and no medical examination is required, which means even if you have a pre-existing illness, you are covered. This is very useful especially if you are denied typical life insurance due to your illness or condition.
You should keep in mind that with mortgage insurance that it is a decreasing life insurance policy that will deminish as you pay off your principle. Therefore, if you purchased you home 20 years ago and purchased a mortgage life insurance policy, and then you die, your insurance amount is only the amount owed on the mortgage not what the fixed amount of your home was 20 years ago.
For most people, having the added benefit of knowing their mortgage would be covered is part of good future financial planning should something unexpected happen. When you purchase your home, it could be a very a wise choice to purchase mortgage life insurance.
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