A mortgage life insurance is important because it is a form of financial
security for your family when you are gone. It pays a lump sum and the cash
payout should be sufficient enough to clear any outstanding loan payments on
your property. It is therefore important to have a life assurance policy that
runs alongside your mortgage. You want to protect your family and loved ones
from mortgage debt.
Why you need mortgage life insurance?
The first reason why you need life insurance protection on your mortgage
is that it will provide peace of mind for you and your family. It is also less
expensive as compared to level term insurance this is because the amount of
life cover or premiums that you need decreases after each and every mortgage
payment. If you have an interest only mortgage then you may consider level term
insurance. In both circumstances however, the beneficiaries will be safe
because the mortgage debt is cleared just after the death of the policyholder,
thus the property won’t be repossessed in any way.
Assessing costs and benefits
Before you can make your final decision about taking a mortgage life
insurance policy you need to assess the benefits and costs involved. The cost
involved will largely depend on the life insurance company you are dealing
with, your age, current health status and medical history. They also look at
your occupation and the kind of sports you do. The question however remains is
mortgage life insurance really adequate? The answer is yes if you survive on a
low budget. The policy will just pay off the mortgage and nothing more or less.
Critical illness cover
You may therefore need to consider a critical illness policy as it
pays a lump sum in the event of a critical illness. some types of critical
illnesses that qualify for this cover are diseases and conditions like cancer,
blindness, bacterial meningitis, heart diseases and stroke just to mention a
few. You will find that different insurance companies have got different definitions
as well as policy exclusions and limitations. It is therefore important to
check with the service provider first before you purchase your mortgage life
insurance policy.
So do you really mortgage life insurance?
It is advisable to get mortgage life insurance but to get the best
policy that meets your requirements you should consult a mortgage adviser. They
deal with similar cases on a daily basis and they also know the best service
providers. You can actually save a lot of money by using a mortgage adviser.
You should compare quotes before you purchase your mortgage life insurance
policy.Labels: insurance policy, life assurance, life insurance