Mortgage Protection Insurance

Buying a new home is an exciting time. But as thrilling as it may be, there are a lot of decisions that come with the purchase of a new home. One decision you may ponder is whether you should buy mortgage life insurance.

Mortgage life insurance, also known as mortgage protection insurance, is a life insurance policy that pays your mortgage debt if you die.

How Mortgage Life Insurance Works

If you buy mortgage life insurance you’ll typically purchase it when you buy your home or shortly after but can be purchased at any time throughout your home ownership. The policy’s length will coincide with the number of years you have to pay off your mortgage.

The mortgage lender is the beneficiary of the policy This means the insurer will pay your lender the remaining balance on the mortgage if you pass away. 

Advantages of Mortgage Life Insurance

One of the advantages of mortgage life insurance is it may give your family peace of mind knowing that if something were to happen to you, the mortgage would be paid off.

No Life Insurance Medical Exam

Mortgage life insurance generally does not require a medical exam and it may have no health questions, either.

For those with medical conditions, mortgage life can be an alternative to traditional life insurance that uses health as a factor in pricing.

Riders

You may have the option of adding life insurance riders to your mortgage protection policy,such as:

• Living benefits. With a living benefits rider you can access money from the policy’s death benefit if you’re diagnosed with a terminal illness (often defined as a life expectancy of 12 months or less).
• Return of premium: This rider would return the premiums you’ve paid after a certain number of months. Check the rider for specific rules and timelines.