Mortgage life Policy
A policy which is designed to repay the mortgage debt in case the borrower dies; in other words, an insurance that protects repayment mortgage. If in the course of the policy the policyholder dies, the policy will pay off the capital sum to repay the outstanding mortgage.
How it Works?
The time when the insurance policy begins value of the insurance coverage is equal to the outstanding of the repayment mortgage. The company which is providing the insurance will calculate on the annual rate at which insurance coverage will decrease as the mortgage balance decreases. Policy’s termination date is also as same as the final payment date on the repayment mortgage.
People Also Ask
- Difference between Term Life & Mortgage Life insurance?Open or Close
In case of Term Life Insurance, the insurance issuer pays the death benefit to the beneficiary. This provides a freedom to choose how optimally the money can be spent.Mortgage life insurance bought from a lender typically pays the death benefit to the lender.
- What happens as my mortgage balance decreases?Open or Close
You will have the benefits as is with you as long as you hold the policy unless you at your end decide to decrease the coverage.
- What if I switch lending institution?Open or Close
If you ever happen to decide to switch lending institutions, you would require to re-apply for mortgage life insurance. Whereas in case of term life insurance which is a portable policy- you can very well own the coverage for the said duration of the term.
- What if I cancel my insurance?Open or Close
You lose all the money you paid as premium for the coverage.
- How would the underwriting process go?Open or Close
This process is duly completed at the time of application itself. The person who has applied it undergoes medical checkup based on the coverage applied for. In the event of death, the company will pay the claim.
- Continue the coverage after the mortgage has been paid?Open or Close
This policy gives you the flexibility to continue the coverage, convert the coverage or cancel the coverage.
- Option to choose the beneficiary of the policy?Open or Close
Yes, this policy gives you the authority to name the beneficiary of your choice for the life policy. Upon death, the survivor gets full rights to use the money the way he/she wants.
Types and Benefits
There are basically two types of Mortgage Life Insurances available
Home is one of the biggest dream that one sees and invests in. The family living in that home depends mainly on the person who brings income to repay the mortgage payments. It caters to the fear of the family members/borrower that if someday the earning member is not alive who would repay the mortgage payment.
You will have a peace of mind that your loved ones do not have to suffer even after you pass away.
WHICH IS BETTER INSURANCE PLAN
Mortgage Life Insurance
It pays the death benefit to the lender and the death benefit or coverage amounts keeps on decreasing as your mortgage balance decreases, but the premium amount will remain same. If in future you decide to change you lending institution then you would have to re-apply for mortgage life insurance.
Term Life Insurance
It pays the death benefit to your beneficiary and they get the complete freedom where they want to spend the money. The death benefit or coverage amount remain the same. In case you change your lending institution in future, your same term life insurance will work.
Types of mortgage protection insurance
Term life insurance
In case you die unexpectedly, your loved ones get affordable and flexible protection which they can use to pay off mortgage or cover other expenses.
Plans Start from $50,000 to $500,000
Critical Illness Insurance
In case you become seriously ill, you will get some lump-sum amount which you can select to spend on medical related expenses and paying mortgage payments; by this you can focus on your recovery. You convert the policy to long term care insurance
Applying for a Mortgage? What You’ll Need
You are six steps away from availing your Mortgage Life Insurance if the following information is available
To find out more, call us on 1-855-846-2524 Or speak to an adviser in our office.