If you’re a homeowner, you know that your home is likely the biggest investment you’ll ever make. It’s not only a place to live, but it’s also a source of financial security and stability. That’s why it’s so important to protect your home and your loved ones who depend on it. One way to do this is by getting mortgage life insurance.
But what is mortgage insurance, and do you really need it?
In this blog post, we’ll explore the ins-and-outs of mortgage life insurance. We’ll also see how works to safeguard your home and loved ones. Finally, we’ll answer if you need it.
Table of Contents
What is Mortgage Insurance?
Mortgage life insurance, also known as mortgage protection insurance, is a type of term life insurance policy that pays off your mortgage in the event of your death. It’s designed to help your family keep the roof over their heads and avoid the financial burden of paying off a mortgage on their own.
How Does Mortgage Life Insurance Work?
When you take out one of these policies, you’ll need to name a beneficiary. This is usually your spouse or partner. If you pass away while the policy is in effect, the beneficiary will receive a pay out. This can be used to pay off the mortgage in full or to make mortgage payments until the end of the term.
However, not all mortgage protection works the same way.
One of the key differences between our policies and what banks offer, is that our plans aren’t tied to your remaining mortgage balance. This means that as you make mortgage payments and reduce your balance, your coverage will not decrease.
Simply put, your loved ones receive a lump sum payment, and they can use it as they see fit.
Compare this to the plans banks offer, where your coverage decreases over time. That’s because these plans are made to protect the banks money — NOT your family’s.
Is Mortgage Life Insurance the Same as Term Life Insurance?
Mortgage life insurance is often confused with term life insurance, but there are some key differences between the two. Here’s a quick breakdown:
Term Life Insurance
Term life insurance is a type of life insurance that provides coverage for a specific period of time, typically 10, 20, or 30 years. It pays a death benefit to your beneficiary if you pass away during the term of the policy.
Mortgage Life Insurance
This is type of term life insurance that pays off your mortgage in the event of your death. It’s designed to help your family keep the roof over their heads and avoid the financial devastation that could come without your family’s breadwinner.
When you get your coverage through your mortgage lender, your loved ones will not have a choice as to how you spend their benefit. In these cases, it must go to pay off the remaining balance.
However, when you get your coverage through Mortgage Insurance Group, your beneficiaries can use your death benefit however they want. That could mean paying off the remainder of your mortgage. That could also mean taking a well deserved vacation to grieve.
The Difference in a Nutshell
In short, while both types of insurance provide financial protection for your loved ones, typically they’re used differently. Term life insurance is a more general type of insurance that can be used to cover a variety of expenses. These can be things like funeral costs, living expenses, and debts.
Meanwhile, mortgage life insurance is specifically designed to pay off your mortgage in the event of your death. However, with a policy from Mortgage Insurance Group, your loved ones are free to spend the money however they see fit.
Do You Need Mortgage Life Insurance?
Now that you understand what this type of policy is and how it works, the question is – do you need it? Here are a few things to consider:
Do You Have a Mortgage?
If you don’t have a mortgage, you don’t need one of these policies and may be better off with simple term-based coverage. A term life insurance policy still protects your loved ones in the event of your death.
Do You Have a Spouse or Partner Who Depends on Your Income?
If your spouse or partner relies on your income to make mortgage payments or pay for other living expenses, one of these policies can help provide financial stability in the event of your death.
- LEARN MORE: Will Interest Rates Go Up Forever? Here’s How to Protect Your Home from Uncertainty in Canada.
Are Your Children Still In School?
Do You or Your Spouse Work in Dangerous Jobs?
In conclusion, mortgage life insurance is a type of term life insurance that pays off your mortgage in the event of your death. It’s designed to help your family keep the roof over their heads and avoid the financial burden of paying off a mortgage on their own.
This this type of policy can be a valuable tool for homeowners who have a spouse or partner who depends on their income and a mortgage to pay off.
If you’re considering mortgage life insurance, it’s important to shop around. Compare policies from different insurance companies to find the best coverage and premiums for your needs.
Mortgage Insurance Group is a reliable company that offers very competitively priced policies that help protect your home and loved ones. Better yet, with us, your loved ones have complete control as to how they spend their benefit.
Don’t Wait Until It’s Too Late! Protect your Home Today.
You can protect your home and loved ones with mortgage life insurance in minutes. Get started now by getting a free quote from the Mortgage Insurance Group. Our team of insurance experts will help you find the best policy to fit your needs and budget.
Get the peace of mind you deserve today. Click the “Get Started Now” button to get your free quote.