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If you have recently taken out or renewed your mortgage then you should consider mortgage life insurance.
What is Mortgage Life Insurance?
Mortgage Life insurance is actually a policy in which the life of the borrower is insured and the coverage amount is fixed like any other life insurance plan. The only difference is in the sum of the coverage amount, which means that amount the policy would pay out if you were to die during the policy.
The lump sum payout under the plan is fixed to the remaining amount of the mortgage or the loan. Under this insurance, if the policyholder dies without repaying the mortgage, the insurance company will pay a sum that will be equal to the sum that the borrower had to repay in order to settle the outstanding balance.>/p>
Main Benefits
Even if the borrower dies, the insurance company will help the family in settling the loan or mortgage, relieving the family from extreme financial stress. Many policies are added with extra benefits such as tax deductions, best to speak to an advisor about the particulars as laws are constantly changing.
Main Drawbacks
The quotes area little tricky as two life spans have to be considered. One is of the borrower or of the insurer and along with it, the life span of the mortgage is also considered. This makes these policies highly attentive, but is not impossible. Also the lump-sum will be close to the outstanding balance of the mortgage, but it is difficult to get the two amounts to perfectly match off as they 'amortise' as different rates.
Alternative option
One can go for mortgage protection insurance and can get the loan settled if the policyholder dies. It is fairly simple insurance, in which, if the borrower cannot repay the loan on any legal ground, the insurance company will do it in his or her behalf. This is probably harder to find than a mortgage life insurance policy, and is often more expensive.
Buy cheap mortgage life insurance
We work with the best life insurance advisors to provide the best value mortgage life insurance plans available in the whole of the market. Click on 'Get a free life quote' and we will help you find the best value policy that suits your particular needs. Our service is 100% free and you are under absolutely no obligation to take the quote.
Guest article: Written by Susan Walters-Smith.
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