When you’re looking into signing the documents for a mortgage, there is always the question as to whether you want mortgage life insurance. It is important to know some fundamental things about mortgage life insurance in order to make an informed decision on whether it is right for you, because everyone has their own needs when it comes to their family and finances.
- YOU CAN APPLY FOR IT WHEN YOU BUY A PROPERTY AND NEED A MORTGAGE.Mortgage life insurance is just that – life insurance for your mortgage. You can opt for it when you sign for a mortgage and essentially it protects you and your family in case of an accidental, non-dangerous activity related death to anyone who has signed on the mortgage and has accepted the mortgage life insurance policy plan.
- IT PROVIDES PROTECTION FOR YOUR LOVED ONES.If an individual that is listed on the mortgage suddenly passes away, it makes it more difficult to make payments – which can lead into default (and possibly even losing your home). By obtaining mortgage life insurance, it pays off the balance of the mortgage from the time of death.
- IT IS EASIER TO QUALIFY FOR THAN NORMAL LIFE INSURANCE.Life insurance through regular insurance companies usually have a HUGE list of restrictions that make it impossible for you to sign up for life insurance. Mortgage life insurance is a lot less strict as to who they accept, considering there are no preexisting medical conditions.
- IT COVERS THE WHOLE AMORTIZATION PERIOD.Mortgage life insurance covers the entire amortization, so it will essentially pay off the mortgage in one lump sum. One disadvantage to mortgage life insurance is that this process takes time once a claim has been put in, so it may take up to 6 months until anything is actually paid out
- YOU SPEND LESS ON THIS TYPE OF INSURANCE.It’s pretty simple – the additional cost in the life insurance is automatically taken from your bank account via pre-authorized payment plan. Typically mortgage life insurance is a lot cheaper than regular life insurance.
- YOU CAN OPT FOR A MORE COMPREHENSIVE PLAN.Considering what we have been seeing thus far in regards to the economy, it is sometimes a wise idea to opt for better coverage that includes job loss. Each mortgage life insurance company has variations and stipulations to these; therefore it is wise to check with your mortgage professional and the company.
- PAYMENTS WILL STAY THE SAME THROUGHOUT THE LIFE OF THE MORTGAGE.Regardless of the fact that the mortgage balance is decreasing, you still pay the same insurance premiums and thus is a disadvantage to choosing to go with mortgage life insurance.
- YOU CAN OUTLIVE THE INSURANCE.If you outlive the amortization of your mortgage, you may be in a position where you essentially have no life insurance coverage – and depending on when you finish paying off the balance of your mortgage, you may not qualify for regular life insurance because of your age or any health problems that pop up during the
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