What is Mortgage Life Insurance?

What is Mortgage Life Insurance?

Mortgage Life Insurance or Mortgage Protection Insurance is designed specifically for the purpose of Mortgage Repayment in the event of the premature death of a primary income earner. This means that if you were to pass away while there was a balance on your mortgage, this coverage would pay out a sum that is sufficient to repay the outstanding mortgage balance which is typically by far a family's largest financial obligation.

Let’s say you borrowed $450,000 to purchase a home. Until your mortgage is paid in full, if you were to default for whatever reason (including illness or death), your lender can make a claim against your home and foreclose to recover what is owed. With Mortgage Life Insurance, the outstanding principal owed on your mortgage is fully paid off, securing your home for your beneficiaries.

How much does it cover?

Mortgage Life Insurance covers the outstanding amount of your mortgage balance.

What are the advantages of Mortgage Life Insurance?

1. It is typically sold in bank branches when a mortgage is acquired or increased, so it is a convenient way to acquire coverage to protect a family‘s largest and most valuable financial asset.
2. It is easy to purchase. Unlike most types of life insurance, there are fewer medical questions to answer and less chance of having to visit a doctor or nurse for a physical examination.
3. It can be cancelled by you at any time or supplemented by additional life insurance as your family’s needs and financial obligations change.
4. With coverage like 20/20, you don’t have to re-qualify if you refinance or move lenders.
5. It can be a good alternative for individuals that don’t qualify for individual life insurance.
6. It is much easier and less expensive to add on coverage that will take care of your mortgage payments in the event of a disability or serious disease than would be the case with an individual life insurance policy.

Do I need it?

Please click here to see why we think Mortgage Life Insurance is important for you and your family.

What’s the difference between Mortgage Life Insurance from my lender and 20/20?

Please click here to read our article Why 20/20 is Better?

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To learn more about whether mortgage life insurance is the best option for you, don't hesitate to get in touch with our team. 

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