Mortgage Life Insurance
Learn why comparing mortgage life insurance quotes are important, and why you need it if you’re a mortgage payer.
As anyone who as ever bought a home knows, there is a lot of paperwork involved in buying any kind of residential property.
One of the many things which prospective homeowners have to deal with before the sale is closed is often referred to as mortgage life cover.
However, there are actually two quite different things which are often called by this name and it is important to understand the distinction.
There are many people who are confused by these two identically named but very different kinds of insurance – if you’re one of them, keep reading to learn more about the difference between the two.
What Is Mortgage Life Insurance?
The insurance agreement that you sign when buying a home is actually an insurance policy for your mortgage lender rather than yourself.
This is more properly known as mortgage insurance rather than mortgage life insurance, which is a type of insurance cover which benefits the homeowner rather than the lender.
Mortgage insurance is a policy which helps protect the lender from losses in the event that the buyer defaults on their mortgage.
There is another kind of mortgage life cover which is designed to benefit homeowners. Like a term life policy, this type of insurance only pays benefits in the event of the policyholder’s death (or depending on the exact details of the policy, in the event of their being stricken with a critical or terminal illness).
We can help you compare mortgage life insurance quotes and find the great policy with the right prices and cover to suit. Click here to compare quotes.
What Does This Type Of Insurance Do?
Unlike standard life insurance policies, this kind of insurance cover is not intended to pay a benefit directly to your loved ones; what is does is to ensure that your mortgage payments will continue to be made in the event of your death.
However, if you default on your mortgage payments for any other reason, mortgage life cover does not cover this.
How Does It Work?
Like other types of insurance, you will pay a monthly premium for your policy for the duration of your mortgage term. The premium does not increase or decrease over the life of the insurance policy, though the amount that it pays out will.
Since the amount owed on your mortgage loan decreases with every year that you continue to make payments, so does your insurance policy – the payout covered by your policy stays equal to the amount owed on your mortgage and expires once your mortgage is completely paid off.
Why Get A Mortgage Insurance Policy?
To put it simply, because having a policy in places gives you the peace of mind that comes from knowing that your family will be able to remain in your home if you were to pass away.
Since your family will no longer have your income to rely on, this type of cover can make all the difference in the world.
Your home is one of the largest investments you will make in your lifetime. In order to make sure that it stays in the family, all you need to do is to purchase a mortgage life insurance policy and fortunately, it’s easier than ever before to find one that meets your needs and fits into your budget.
Back to top: Mortgage Life Insurance Quotes