Buy Mortgage Life Insurance To Clear Your Mortgage Debt
Are you a middle class or a low income person on whom the family is financially dependent? You might buy a house with a loan but paying off the loan can be a real problem at times. This is especially true if you die in a few years and leave behind a family deep in mortgage debt. One of the best ways to avoid this unfortunate situation is to purchase mortgage life insurance. In other words, mortgage life insurance is usually a term life insurance which will pay off your mortgage loan in the event of your premature death or that of the co-borrower. Usually, it is offered by most private insurance companies and lenders.
There are many kinds of mortgage insurance available in the market. It is important to get all details regarding each plan before you make a choice. Some plans pay in case of an accidental death. Some mortgage life insurance plans decrease in value as your mortgage debt decreases. Some protection insurance plans allow you to transfer the insurance to another lender. A declining death benefit plan is very popular in the market today. The death benefit of the policy is equal to the mortgage balance that is outstanding on your home. Over the years, as you make your mortgage payments, the mortgage balance declines.These plans are highly popular among people today.
In earlier times, protection insurance was meant only for the family after your death. However, nowadays, mortgage protection insurance can also cover if you should have a critical or terminal illness or become disabled permanently. It will provide your survivors with a tax-free benefit to pay off the entire mortgage and any other expenses. The cost depends on the amount of your mortgage, your age, health conditions and other factors including occupation and lifestyle.
While purchasing any kind of mortgage life insurance, you are entitled to the knowledge of all benefits you accrue. Make sure that all the details are enclosed within the policy you receive. You can also request a copy of the master policy, if you buy the insurance from a private lender. There are many other things you need to take care of while purchasing such life insurance. Reading the fine print of the policy is essential to see that the coverage is just what you asked for. Mostly, additional benefits can be obtained by paying only a little more than the default monthly premium amount.
While mortgage insurance is a term life policy, you can also opt for cash life insurance. With a cash value insurance policy, you get coverage for the rest of your life or until you stop paying the premiums. Part of the premiums that you pay goes towards the death benefit. The other portion goes towards the cash value of the policy. The portion that goes towards the cash value is invested by the insurance company. A team of professional money managers ensure that the money continues to grow, providing your family with a way to live with dignity after your death.
by: Clay Torres.