Ever asked yourself, 'How do I save our home if my spouse dies?' If this question worries you, then perhaps you should look into obtaining a mortgage life insurance. This is usually offered to home owners through as a mail offer, that is if their mortgage loan institution is affiliated with this type of insurance company.
The way this mortgage life insurance works is, the mortgage balance is paid in full, should your spouse or mortgage borrower die. Some people choose not to get this policy because they never see the money. The insurer will pay the money directly to the bank institution. Many feel a life policy disbursed to them can cover mortgage and anything else they need, while leaving them in control of how to spend the money. When a loved one dies, there are so many things to take care of such as funeral costs, and unexpected expenditures that comes with it. You still have to leave income to supplement your spouse's income. With so many things to pay off, paying the mortgage in full might be moved to the bottom of the list. With home mortgage protection you can use your life insurance as you need and have your mortgage paid in full, without you having to worry about it.
Another reason why home owners choose to opt out of home mortgage protection is that as the mortgage balance minimizes so does the policy value. For example, when you purchase this protection plan when the mortgage balance was $20,000 then the policy value is $20,000 with a fixed rate and set premium rate. When your mortgage balance drops down to $5,000, the policy value will also be $5,000 but the premium rate and fixed rate will still be the same.
You can purchase a home mortgage protection or mortgage credit life insurance with return of premium. If the policy holder survives the premium term, then all the premium paid will be refunded back to the policy holder. So although the premium does not go down when the mortgage balance and policy value does, it can still be recovered.
Another thing to consider is there are no medical exams required like there is in a life insurance policy. There are however health questions that would need to be answered when trying to obtain a mortgage life insurance.
Since there is no medical exam or blood test done, it is much easier to obtain when having pre-existing health conditions.
These are just some things to consider when obtaining a mortgage credit life insurance. It mostly helps the lender recover their money should you die, but also benefits your family. It gives them a paid home, peace of mind and one less thing to worry about in your absence. This mortgage credit life insurance is not for everyone, some choose to opt out. You have to weigh in the pros and cons in your personal situation to figure out if this is the right choice for you and your family.
Insurance Brokers Group helps families with term life, mortgage life insurance and no medical exam life policies
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