![]() The death benefit must be used to pay off the mortgage.The death benefit decreases as you make mortgage payments and reduce your outstanding balance.The amount of the death benefit (the amount your beneficiary will receive) is equal to your outstanding mortgage balance.Table 1: Compare mortgage life insurance and term or permanent life insurance Upon your death, your beneficiaries may use the insurance money to pay for the mortgage. With term or permanent life insurance, the death benefit, or amount payable to your beneficiaries, won't decrease over the term of the policy. ![]() Term or permanent life insurance may provide better value than mortgage life insurance. Mortgage life insurance vs term or permanent life insuranceĪs you pay down your mortgage, mortgage life insurance covers a smaller amount of money. Your lender can't force you to buy a product or service as a condition for getting another product or service from them. Shop around to make sure you’re getting the best insurance to meet your needs. You can buy mortgage life insurance through your mortgage lender, or through another insurance company or financial institution. Premiums are usually added to your regular mortgage payments.Īs you pay down your mortgage, the premiums generally remain the same, even though you’ll owe less on your mortgage over time. You pay a fee called a premium, based on the amount of your mortgage and your age. Keep in mind that your home can be sold to pay back the mortgage, so mortgage life insurance may not be necessary for you. It can be useful if you have dependents or a spouse who might like to stay in your home after your death, but who might not be able to continue making the same mortgage payments as before.īefore you buy mortgage life insurance, check if you already have insurance coverage that meets your needs through your employer or another policy. Mortgage life insurance is an optional product that may pay the balance on your mortgage to the lender upon your death. Learn more about credit and loan insurance. These optional products are different from mortgage loan insurance that you are required to purchase if your down payment on your home is less than 20%. ![]() Read your policy carefully and ask questions if there’s anything you don’t understand before purchasing these products. There are important limits on the coverage that optional mortgage insurance products provide. Don't hesitate to ask questions and make sure you understand the insurance product you have or want. Take the time to describe your financial situation to ensure you get the right product. They also must tell you if they’ve assessed that a product or service isn’t appropriate for you. ![]() If your lender is a federally regulated bank, they must offer and sell you products and services that are appropriate for you, based on your circumstances and financial needs. Make sure that the insurance meets your needs in terms of protection. Learn more about giving express consent for optional products and services. You must give your express consent to obtain this product. The lender cannot insist that you buy mortgage insurance. You don’t need to purchase optional mortgage insurance to be approved for a mortgage. Optional mortgage insurance is a type of credit and loan insurance that you're usually offered when you take out or renew a mortgage. Optional mortgage insurance products are life, illness and disability insurance products that can help make mortgage payments, or can help pay off the remainder owing on your mortgage, if you: What are optional mortgage insurance products ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |