Life insurance is usually not required when getting a mortgage loan on your home unless the down payment is very low, for example, 5% or less.

Then, the borrower is required to buy a type of insurance called "PMI", or Private Mortgage Insurance. This insurance coverage would pay the lender what is owed to them from the outstanding unpaid balance on the mortgage loan in the event of the mortgage borrower's death.

However, many people do use regular term life insurance to protect their mortgage loans.

Term life insurance can be purchased in the same number of years as the mortgage (20 or 30 years); is a very affordable cost for that what can be a large amount of life insurance coverage; the life insurance death benefit amount does not decrease as the mortgage goes down; and the life insurance death benefit goes to the beneficiary of your choice, not the lender.

With today's low mortgage rates, it may not be in the best interest of the beneficiary to pay off the mortgage with the life insurance benefits.

Having a life insurance benefit to invest or pay other bills could allow the survivor (beneficiary) to keep paying the mortgage and keep the home your family shared with you. Or they could pay it off  and keep the remainder of the life insurance proceeds to use as needed.

Learn how mortgage term life insurance can help to protect your family and your home.