What is mortgage life insurance?
Mortgage Insurance is that insurance in which you can cover your mortgage in the
major event of your death. Mortgage life insurance, also known as mortgage insurance
or creditor insurance, is offered by most banks and lending institutions. It is
a life insurance policy that pays the balance of your mortgage to the lending institution
if a person listed on the mortgage passes away.
Purchasing your dream home is often the single largest purchase a person makes in
their lifetime. But in times of unpredictable circumstances if you were to become
critically ill, suffer an accident or die the financial burden of paying for the
mortgage falls on the family members. Would your family be able to keep making the
mortgage payments? Would they have to sell your home? You can protect your family
home with Mortgage Life Insurance, a flexible, low-cost way to protect one of your
largest outstanding financial obligations.
Protect your Family and Home
Life is unpredictable. Your dreams may be shattered and your life can take a wrong
turn all of a sudden. To protect all your assets and to cover your liabilities such
as mortgages it is always a wise decision to be protected by buying mortgage insurance
along with the bigger purchase your Home. If you die, get a life-threatening illness,
or suffer an accident, your Mortgage Life Insurance can pay the following benefits
Benefits of Mortgage
- Your entire outstanding mortgage principal amount
- Up to five years of accrued interest, and
- Any debit balance in your tax account
In the case of an illness which has been diagnosed as fatal within one year, this
insurance offers an early payout to help relieve financial concerns. For additional
security, the same protection is also available to your co-borrowers or to the guarantor(s)
of the mortgage.
Coverage for your mortgage can start on the date your mortgage is approved. This
way, you are protected even before your new purchase closes. If your mortgage is
over $500,000, you may be eligible for partial Mortgage Life Insurance coverage.
Differences between a Mortgage life insurance vs. individual life insurance
- Mortgage insurance is very different from individual life insurance because the
coverage declines each year or declines as the mortgage declines
- The bank is the beneficiary in mortgage insurance while in an individual life insurance
policy, the insured can choose their own beneficiary.
- The coverage is not transferrable. This means that the insurance is tied to a specific
mortgage. With an individual policy, the insured can keep their coverage if they
move homes, switch banks, or eventually pay off their mortgage.
- The plan ends as soon as one spouse passes away. An individual policy can be set
up as a joint policy, meaning a joint or multi-life policy, which allows the beneficiary
to receive a double benefit in the event that both spouses pass away.
- The coverage is not convertible. A mortgage life insurance policy is not convertible
to a permanent policy, but an individual term life policy is convertible to a permanent
plan without a medical. This allows the insured, who may have developed some health
issues over the life of the policy, to convert to a permanent level rate plan without
any health questions or without any medical tests.
When purchasing your new home, take the time to shop and compare lowest quotes for
life insurance. Compare the cost of a term life insurance policy to a mortgage insurance
policy. Chances are you'll find a term life insurance policy will have lower yearly
premiums and offer more coverage and flexibility than a mortgage insurance policy.
We at Punjab Insurance Inc. Offer and assure lowest quotes on term life insurance
and mortgage insurance.