premature loss of a family wage earner often means not just
the loss of a regular paycheck, but also the loss of the family
home. This further tragedy is avoidable with some life insurance
planning, a part of which is to make sure that a home mortgage
can be paid off.
is Mortgage Protection?
Your home is often your biggest investment, but without mortgage
protection, it can become your biggest debt. The premature
loss of a family wage earner often means not just the loss
of a regular paycheck, but also the loss of the family home.
providers usually require you to purchase insurance guaranteeing
repayment of your mortgage loan in the event of your death.
By using a life insurance policy for mortgage protection instead
of one offered by the mortgage lendor, you are not restricted
to the exact amount of the mortgage, you own the policy not
the lendor, and it goes with you to cover your next mortgage.
Your family will have the funds needed to pay off the balance
of your loan plus help cover any other outstanding expenses.
on the life insurance plan, you can choose from a variety
of options including additional income at retirement.
Do I Need Mortgage Protection?
Whether it's a new home, rental property, or real estate,
you received a mortgage because the lender felt comfortable
with your income level and reputable financial situation.
You are a good credit risk and the lender is fairly confident
that it will receive its loan amount back plus interest. What
happens if you, as the primary income producer, die? If you
are in a dual-income situation, what happens if one person
dies? Besides the emotional trauma, a surviving spouse could
experience a significant drop in the household's level of
loss of an income source can produce severe financial problems
for your family that could lead to possible foreclosure. Basically,
you purchase mortgage insurance so, in the event of any untimely
death, funds are available to meet any outstanding mortgage
Should I Purchase Mortage Protection From?
When you purchase insurance from a bank or mortgage company,
you generally lose all ownership control. In some instances,
the lending institution pre-prints its name on the beneficiary
line of the policy. You pay the premiums and the lender receives
the proceeds at the insured's death. Your family receives
the deed to the house. On the surface, this may seem like
an equitable solution, but there are several reasons why a
surviving spouse may not want to remain in the home:
The daily reminders of your loss may be too difficult
for your spouse and family to handle.
The house may simply be too big to maintain.
Your spouse may want to move closer to friends and
Your spouse may need to relocate to a better job or
It may be better at this time not to pay off the mortgage
and lose the tax deduction on the interest payments. Your
spouse may want to pay the mortgage to a point where he/she
can comfortably handle the payments and keep the tax deduction
of the interest payments.
mortgage protection as a part of your life insurance plan
allows you more options and flexibility.