Mortgage insurance

Mortgage insurance is sometimes referred to as decreasing term insurance, mortgage protection life insurance, or mortgage life insurance. Mortgage protection life insurance ensures that your mortgage would be repaid if you died during the policy term.

What is mortgage protection life insurance?

If you die, your mortgage is retired, the balance paid off and your family will receive a debt free home. Could your family afford to live in your home if your income was no longer available?

How does mortgage protection insurance work?

The amount of insurance you purchase is equal to how much you owe on your mortgage. As you make your monthly mortgage payment, the amount of the mortgage protection decreases as well. This is known as decreasing term insurance. If the insured dies during the term or this policy, then the mortgage will be paid off.

Other types of mortgage protection

The other type of mortgage protection is mortgage payment protection insurance also known as MPPI. This covers your mortgage payments if you become ill or have an accident and cannot work. Not to be confused with Accident, Sickness and Unemployment insurance (ASU). MPPI covers a specific financial product, for example your mortgage. Were as ASU covers you for a certain amount every month.

Wouldn't it be nice to know that if something were to happen to you, your family would not have to sell their house because they can't make the mortgage payment? Mortgage protection insurance guarantees that the mortgage is taken care of.

It is often less expensive to purchase a term life insurance policy to function as a mortgage protection life insurance policy. The face value of the insurance policy will not decrease. If you could use the added coverage amount to meet the insurance needs of your family, a level term life insurance policy is usually a better buy. The savings with a decreasing term policy is usually not significant enough to warrant the coverage.

Term Life Insurance Quote

More information regarding mortgage protection life insurance:
Types of term insurance (from III.org)