Mortgage life insurance is an insurance plan that protects your mortgage if you die before paying it off. The idea behind mortgage life insurance is to help you pay off your home loan if anything were to happen to you so that your family does not have to worry about making monthly payments on their own. It’s essential for homeowners who are carrying a large amount of debt or those who are looking at buying their first house to consider this coverage as an investment in themselves and their loved ones. Read more below!
1) How Does Mortgage Life Insurance Work?
Homeowners typically purchase mortgage life insurance after they move to their newly purchased residence or shortly after. The length of the policy you choose coincides with the mortgage payments duration.
Mortgage life insurance is usually offered by a company associated with your mortgage lender. If you buy the insurance from your lender, you can roll the premiums into your loan.
However, you can also obtain mortgage life insurance from any other company of your choice. In this case, there is no possibility to lay the premiums into your loan unless they offer that option, too, which is usually not the scenario. Mortgage life insurance pays off any outstanding debt in case of death or total and permanent disability (TPD).
While considering the possibility of purchasing mortgage life insurance, you might want to discuss it with a professional company like Morgan Financial Service.
2) The Benefits of Mortgage Life Insurance
Mortgage life insurance gives your family much-needed peace of mind, knowing that your mortgage payments are covered in case of any untoward accident or unforeseen circumstances. Below are other benefits:
Another benefit is the income guarantee, which means that, regardless of how long you are disabled, your family will continue to receive a monthly payment toward their mortgage or rental payments. If they have other sources of income, then this may reduce this amount accordingly.
Unlike other insurance types, mortgage life insurance does not require a medical exam. You can apply even if you are in poor health.
Another benefit is that your beneficiaries will receive 100% of the insurance proceeds, which means they get their money immediately and do not have to wait for too long like other types of coverages. The money goes directly to the ones that apply for it.
3) Disadvantages of Mortgage Life Insurance
Mortgage life insurance has some disadvantages as well. First, the policy is considerably expensive for individuals in good health. Second, the amount of coverage cannot be increased. And finally, some lenders may not accept this kind of insurance because it is more challenging to write than other life coverages.If you require coverage for your mortgage in Meridian, ID, then Morgan Financial Service is here to help you. We offer mortgage life insurance allowing you to pay off your mortgage without the worry of losing ownership of your home. Contact us now!