Mortgage Life Insurance
Many mortgage companies and banks offer their clients a life insurance program to pay off the
mortgage balance in case of an untimely death. It's geared to protect the financial investment of the mortgage
company more so than offering you a normal life insurance product.
In essence, these lenders typically offer decreasing term life insurance in that the amount of protection lasts
only for the loan duration and declines as the mortgage balance decreases. The advantage
to this protection offer is that it's very easy to implement and requires no underwriting. If
you're uninsurable, this offer makes tremendous financial sense.
However, there are a couple of MAJOR DRAWBACKS. First, due to the no
underwriting requirements, these policies aremuch more expensive then you could
purchase individually. In addition, the lender is the policy beneficiary, not you (not to mention that
you'll be paying the same rate for less and less insurance as you pay off your mortgage).
Having a Mortgage Life Insurance policy in your name with a beneficiary of your choosing makes financial sense
if you are insurable. You can protect your home in the event of an untimely death and, at the same time,
control the policy beneficiary.
If you are a healthy individual, please complete our Life
Insurance Quote Request Form to compare rates and review different alternatives to the lender-based
mortgage life insurance protection plans. It definitely might make more financial sense and worth
investigating.
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