When people make the big plunge and purchase a home, they will usually be taking on the financial liability of a mortgage. This will usually be the largest form of debt they will ever encounter due to the cost of a home in comparison to the purchase of a car, furniture, appliances etc. Mortgage brokers and bank loan officers will sometimes promote you to purchase mortgage life insurance and even disability income insurance in case you were to pass away unexpectedly or become ill and no longer be able to work and generate an income.
This is a form of term life insurance with a face amount otherwise known as a death benefit. This benefit starts out life for the full amount of the mortgage and then reduces each year to go hand in hand with the amount still owed on your mortgage contract.
Your bank would normally be the beneficiary of a mortgage life insurance policy.
This type of life insurance would list the bank as the beneficiary to pay off your loan so it will not represent a financial burden for you dependents who would probably be forced to default on your mortgage and lose their home. This type of life insurance is normally lower in cost than conventional Term life insurance but you have to remember that the purpose of this insurance is only going to be used to pay off your mortgage with no money left over for your dependents what so ever. The face amount goes down with every year until it reaches zero when your mortgage is completely paid off. This form of life insurance used to be more popular years ago but it has lost its popularity.
The disadvantage is the insured would be paying for the mortgage life insurance and then normally has to apply for conventional life insurance to cover his dependents for the year to year expenses such as food, clothing, schooling, medical expenses and the list goes on. Everyone knows how expensive it is to life in this day and age. Affordable term life insurance offers the best value for your dollar.
Mortgage life insurance is a good investment for the individual taking out the loan.
Mortgage life insurance is definitely what you would call a good investment but it would be much more practical to purchase conventional term life insurance in order to kill two birds with one stone. The premiums for mortgage life insurance normally stays level in cost each year but the face amount keeps going down and down in relationship to your balance of the mortgage you still owe the lender.
The most important factor is your dependents would still have a roof over their heads instead of the other side of the coin which means they would be forced to move and lose their home which would be a very depressing picture to behold. Mortgage life insurance vs. Term life insurance sounds a little confusing, but as you read on you will begin to distinguish the difference.
Here is a very good point to remember about Mortgage life insurance.
One of the most important points to remember is not to confuse mortgage life insurance with private mortgage insurance also known as PMI which is intended to covering the bank if you default on your payments as a result of losing your job or become disabled and no longer able to work. Private mortgage insurance only covers the bank and not your dependents.
The modern way to cover your family and your home mortgage is to purchase affordable term life insurance and get the best of both worlds as far as covering the expenses if you pass on. With this route you will be able to purchase a death benefit which will not only pay off the mortgage; it will protect your dependents future for many years to come.
Our website offers a death benefit calculator which will help you determine how much life insurance you will need based on your income and expenses. You will want to make sure you are applying for enough life insurance but not too much where you will have a difficult time paying the premiums along with all your other living expenses.
Use our Term life insurance quoting tool and see for yourself.
We suggest filling out our quoting form and comparing term life insurance quotes from all the highest rated life insurance companies in the US. You will be able to compare Term and Universal life insurance quotes from highly rated companies as Prudential, MetLife, New York Life, Transamerica, Banner Life, SBLI and many more. Purchasing a conventional term life insurance policy will be the most cost effective way to go to cover all your financial liabilities.
Needless to say the best time to purchase life insurance is when you’re as young as possible but not many people consider life insurance until the point in their life when they really need it for a major purchase such a purchasing a new home. If you are considering purchasing low cost term life insurance there is no time like the present. The older you get the more expensive it can be. Life insurance rates have gone down in the last few years due to the fact that people are simply living longer that before thanks to improvement in the medical field and better eating habits.
The convenience of using a modern life insurance quote engine.
Comparing the best term life insurance quotes is easier than ever thanks to the invention of the quote engine where you can see side by side comparisons in less than a minute. Trying to do this years ago would take hours and even days instead of just minutes. Being able to review a large selection of carriers will give you the opportunity to view all your options before you finally make your choice. Feel free to contact us at any time for no obligation assistance and we will be happy to answer all your questions.
We are life insurance brokers that have access to all the best carriers and we do not work for a life insurance company as a captive agent would such as a State Farm or a Farmers insurance company agent would. We are completely focused on finding our clients the best possible life insurance products for the very lowest premium available. You can call us toll free 7 days a week and evenings for you convenience. Our service to you is free and with no obligation what so ever.
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