What is mortgage life insurance and should I get one?Answer:
Homeowners should know what mortgage life insurance is - this is an insurance policy purchased to protect your mortgage so that homeowners and their families don't lose their home in case the mortgagor dies. Upon death, the mortgage will be repaid in full.
How to choose mortgage life insurance coverage?
The typical mortgage life insurance used to have decreasing coverage as the mortgage amount declined. However, comprehensive life insurance policy rates are too good and the coverage is way better, so the decreasing coverage mortgage life insurance is no longer as popular.
Rather, it is recommended you purchase life insurance with coverage for your mortgage, or you get a return premium option with the mortgage life insurance. This way, if no insurance event ever occurs throughout the life of your mortgage, you will get your mortgage life insurance premiums refunded to you.
It is important to know that the mortgage life insurance only will take effect and pay the mortgage if the policyholder dies and the mortgage life insurance policy and payments were up-to-date. Even if the insurance policy has expired a day before the policy was triggered, the insurer has no obligations whatsoever, if the policy wasn't effectively renewed, or if mortgage life insurance premiums were not paid on time.
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