What Is Mortgage Life Insurance?

Before we dive into why you should get mortgage life insurance, let's clarify wha...

Mortgage loan companies usually offer their clients the option to buy mortgage decreasing term life insurance which guarantees that your mortgage will be paid off in the event of your premature death.

Although the idea behind it sounds good, purchasing mortgage term life insurance is usually not recommended, unless you are in extremely poor health and cannot qualify for life insurance coverage elsewhere. 

Who will benefit from mortgage term life insurance?

Mortgage term life insurance can be th...

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 prote...

You may or may not need life insurance with a mortgage.

Your lender may require you to carry mortgage insurance if you are making a low down payment on your home. Mortgage insurance names the lender as beneficiary and the death benefit goes to the lender to pay off your mortgage loan upon your death.

However, you may want to consider mortgage term life insurance if you own a home with a mortgage. Mortgage term life allows you to name your spouse, or anyone you choose, to be...