Let’s face it – mention things mortgage life insurance – in fact anything personal finance related - and we all know that it is as dull as dishwater. However, without things like mortgage life cover - life could be a lot harder financially.
So, what is mortgage life insurance and what is so great about it?
Basically, in the event of you or your spouse dying, mortgage life insurance can mean that the difference between keeping a roof over your family’s head or ending up having your home repossessed – an unpleasant thought.
And while many of us find getting something like life insurance a somber business as it makes us face our mortality, it is the right thing to do for your family to make sure that your finances are in order in the event of your death.
So why do you need mortgage life insurance coverage?
A term life insurance policy runs for a fixed term – most people take it to run concurrent with their mortgage. Should you die before the end of the term period, the policy can help pay off outstanding balance of the mortgage on your home.
This means that your family will not have to worry about trying to make the mortgage payments in the event of a death and loss of income. Neither will they have to worry about selling up and maybe downsizing in order to keep a roof over their heads – the last thing that you would want to put them through.
What are my mortgage protection insurance options?
Mortgage protection insurance policies are available on a single or joint life basis. If you have a joint life policy, the amount is paid out on the first claim only. You can decide how long you want the policy to run for – 10 years, 20 years or to age 100 and most people have it to run concurrent with the term of their mortgage – and in most cases you can have additional benefits such as critical illness or disability coverage added into your policy.
With term life insurance, if the policy is paid out before the end of the policy term, it ceases. And if the policy is in force at the end of the term, it will have no cash in value.
If you are looking for mortgage life insurance, then find a life insurance broker who can shop around and do not automatically accept the first offer you get from your lender. Premiums as well as terms of the policy and other benefits can vary wildly from provider to provider and you could be surprised just how cheap mortgage life insurance can be, without any compromise on coverage.