Buying a home is a huge investment and often the single largest purchase a person makes in their lifetime. But what would happen to your family and home should the unthinkable happen? Would your family be able to keep making the mortgage payments? Would they have to sell their home?

Mortgage life insurance, also known as mortgage insurance or creditor insurance, is a financial product used to protect your family and home by paying the balance of your mortgage to the lending institution if a person listed on the mortgage passes away.

Like all life insurance, mortgage protection insurance is an agreement between you and a life insurance company. You agree to pay a predetermined rate. The life insurance company agrees to pay a sum of money to your beneficiaries if you die--as long as you were still paying your premiums at the time of your death.

This mortgage life insurance death benefit can then be used by your beneficiaries to pay off your home mortgage.

How is Mortgage life insurance different from term life insurance?

Depending on your age and health, the premiums on mortgage life insurance can be much higher than what you would pay for a term life insurance policy. Mortgage life insurance policies only cover you for the amount of your mortgage you owe to the bank. As you pay down your mortgage, your coverage amount decreases with it. This is called a reducing balance. With a term life insurance policy, you have a constant level of coverage for the whole term.

What are the benefits to having Mortgage Life Insurance?

Should you pass away, your outstanding mortgage would be reduced or paid off without burdening your family. Mortgage Life Insurance helps provide security to both you and your co-borrower. If your co-borrower does not qualify for life insurance, you can still apply.

Please click here to learn more about Term Life Insurance or call MyInsuranceBroker today and we can help make sure that your mortgage is covered.