Mortgage Life Insurance For You, Not Your Lender
Posted by: The Key Man, in Life InsuranceA lot of people get mortgage life insurance mixed up with private mortgage insurance, or PMI. PMI is a type of insurance that protects your lender. You normally need to have this type of insurance until you have paid off 20% of the mortgage. After that, PMI is no longer required.
Mortgage life insurance is life insurance purchased to protect your family and your home in the case of your unexpected death. The death benefit is provided to your beneficiary, and they can then use the money to pay off the remaining portion of the mortgage, or use it however they please.
I would definitely suggest getting some type of mortgage life insurance. It doesn’t have to be a term policy, or even a policy purchased solely to cover the mortgage. Most financial service professionals would suggest that you evaluate your entire financial situation and then get adequate coverage that will work for all of your needs. I would tend to agree with that advice.
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February 20th, 2008 at 7:10 pm
Thanks for the clarification. I was recently trying to figure out the difference betweent the two types of mortgage insurance. Your post was really helpful.
Now if only I could figure out a way to get out of the pmi. That is just money I’m blowing away.
February 20th, 2008 at 7:14 pm
No problem bga. I was recently looking up this information as well. That’s why I wrote the post. Plus it seems like there’s a lot of confusion. Understanding the difference between the two will at least help you find the right information you’re trying to look for.
February 22nd, 2008 at 12:00 pm
Interesting description of PMI. It seems like it is a great way to protect my family in the event of my untimely death.
Is there any carrier that deals specifically with mortgage life insurance?
Thanks.
February 22nd, 2008 at 2:48 pm
Well tor, it seems that you might be slightly confused as far as the difference between pmi and mortgage life insurance. Remeber that pmi is private mortgage insurance that protects your lender, not you or your family. Mortgage life insurance is a regular life insurance policy designed to protect you and your loved ones if you were to die.
February 22nd, 2008 at 2:50 pm
Tor, in regards to specific carriers, any life insurance company will offer mortgage life insurance. It is called mortgage life insurance because it is used to pay off your mortgage, but really it’s just a regular life insurance policy purchased for that specific reason. So really, any life insurance company will be good. The secret is to look for a strong company that will offer you the best rates.
March 6th, 2008 at 10:25 am
Thanks for getting back to me on that mortgage life insurance information. I will make sure to check back here for advice if I make any decisions to purchase mortgage insurance.