A home is one of the most important investments in a person’s life. Therefore, it may be a good idea to take steps to protect that asset in the event that a mortgage holder is disabled or passes away. Buying a mortgage life insurance policy could be the best way to make sure that the family home stays in the family even if there is an outstanding mortgage balance.
What Is Mortgage Life Insurance?
Mortgage life insurance provides money to pay off the balance of a mortgage in the event that the person paying the mortgage becomes disabled or passes away. In many cases, this money is provided tax-free and may be passed on to future generations depending on how the policy is written. As opposed to private mortgage insurance, this type of policy protects the borrower, not the lender, in the event that mortgage payments are not made.
How Much Does Such a Policy Cost?
The good news is that a mortgage life insurance policy doesn’t cost a lot of money. In many cases, a $100,000 policy can be had for as little as $250 a year and provide protection for either 15 or 30 years if purchased as a term-life policy. For the convenience of the person holding the policy, it may be possible to pay the premium in a lump sum or prepay it in a manner suitable for the policyholder.
A Bundling Discount May Apply
For those who are buying mortgage life insurance from an insurance company that they already get their car, home or other insurance policies from, it may be possible to obtain a bundling discount. This means that you can save on your mortgage insurance policy as well as the other policies that you have.
It is always a good idea to buy insurance to protect your interests. With a mortgage life insurance policy, you can rest assured that your family will not be put on the street because you die or are otherwise unable to pay the mortgage due to a permanent disability.
Do you have a mortgage insurance policy? If not, how will you pay for your home if your spouse passes away or becomes disabled?