What is Mortgage Protection Insurance & Why Should I Consider It?
Stephanie Banks - November 17, 2021
Mortgage Protection Insurance is an affordable type of term life insurance specifically designed for homeowners. It typically provides coverage for the same number of years, or “term” of your mortgage. The amount you need depends on your income and your dependents and/or spouse’s other life insurance coverage, if they have any.
It works a lot like traditional life insurance. You pick the amount of coverage and the number of years. Once your application is approved, you’ll make a monthly or yearly premium payment. As long as your premiums are up to date, if you were to pass away during this time, the insurance company will cover the remainder of your mortgage payments so your loved ones can stay in the family home. You can also purchase riders, which offer things such as additional coverage if you become disabled.
It is actually one of the most affordable types of insurance. Premiums are determined using your age, health and whether or not you use tobacco. Many times you don’t even need a medical exam to qualify.
Proceeds are often tax free and are paid to your beneficiary, not the lean holder. Your beneficiary can actually use this money however they want. They could use it to pay off the mortgage and stay in the home, or they may choose to pay off high interest credit cards, as an example.
Mortgage Protection Insurance is a unique product many people use nowadays to help their loved ones keep their house without tapping in to any other money they
may have left behind. While it isn’t the right fit for everyone, I encourage you to reach out and discuss whether this type of policy would be a good fit for you.