Written by daniel | Posted in Insurance |

Mortgage Life Insurance Policies

There are many benefits to purchasing a mortgage life insurance policy because in the event of your death, if you are the main bread-winner or the head of the house, your mortgage would be paid in full and your family would be able to remain in the home. There was a time when the only policy allowed was the typical decreasing insurance policy as the mortgage decreased, but there are other options today which may make more sense for you.

Today, you are able to take out a mortgage life insurance policy that is the same amount as the original mortgage. Therefore, if you original price of the mortgage were $500,000, then that would be the amount of the life insurance policy, this would be a standard term insurance policy, but it would cover your mortgage, additional bills, and even your funeral.

You can also choose the benefit term. For instance, you can pay a set amount for the policy over 20 to 30 years, by using this plan; you never have to worry about your cash value decreasing. In addition, your rates never increase either.

Moreover, there is another option that is available, which is called the Return of Premium Term Life Insurance. This option allows you to receive all the premium payments you have made back without taxes. This is quite popular because you are guaranteed your mortgage will be paid off if you should die. However, if you live after the mortgage is paid off, then you get all of the money back you paid in premiums. This money you are free to use on anything you wish and it is not subject to taxes.

In the event the home is in both you and your spouses names, then you would need to have two policies, one on each of you to protect the each other in case one of you dies sooner than the other.

Popularity: 1%