Taking A Closer Look at Mortgage Life Insurance
Are you worried about how your loved ones will pay for your home after you pass away? If you want to make certain your loved ones will have a roof over their heads after you pass away, you might want to consider purchasing mortgage life insurance. Before you make this purchase, however, it is a good idea to learn more about mortgage life insurance in order to determine if it is truly the type of policy you need.
What is Mortgage Life Insurance?
As the name implies, mortgage life insurance is a form of life insurance that pays your mortgage off after you pass away. Mortgage life insurance is different from credit life insurance, which is sold through the lender at the time the mortgage is taken out. With credit life insurance, the purpose is to protect the lender if you should pass away. With mortgage life insurance, on the other hand, the purpose is to protect the dependants of the person who passes.
Unlike traditional forms of life insurance, the value of a mortgage life insurance policy actually goes down over time. This is because the value of the policy is only equal to the amount of money you still owe on your mortgage loan. As you pay down the loan, the amount of the pay out goes down as well.
Is Mortgage Life Insurance Right for You?
Whether or not you
should purchase mortgage life insurance depends upon you and the needs
of your loved ones. Unlike a traditional life insurance policy, your loved
ones will not receive the money if you pass away. Rather, the life insurance
benefit is paid directly to the mortgage company. As such, you can rest
assured that your mortgage will be paid off if you should pass away. If
your beneficiary or beneficiaries tend to be irresponsible with money,
taking out a mortgage life insurance policy is a good way to make sure
they have a roof over their heads after you pass away. If your beneficiary
or beneficiaries are responsible, on the other hand, you might be better
served by a traditional life insurance policy.