Mortgage life insurance is a policy designed to pay off your mortgage in the event of your death or disability. Commonly, the policy has a decreasing benefit (face) amount that decreases proportionately to the decreasing balance of your mortgage. You, as the policyholder, name a spouse or someone else as the beneficiary so that they can pay off the mortgage in one lump sum. Alternatively, your beneficiary can keep the death benefit and continue making monthly mortgage payments.
Most companies offering medically-underwritten level life insurance offer three or four non-tobacco underwriting classifications, ranging from Standard to Preferred Best. If you're in good health, the cost of Preferred Best Non-tobacco is likely to be significantly lower than the Standard Non-tobacco. If you're not a smoker or overweight and are taking medication to treat Hypertension (for instance), then you may qualify to be eligible for Standard Non-tobacco rates.
Most companies offering medically-underwritten level life insurance offer three or four non-tobacco underwriting classifications, ranging from Standard to Preferred Best. If you are in excellent health, the rate for Preferred Best Non-tobacco will be much less than Standard Non-tobacco. If you are a non-smoker, overweight, and taking medication for Hypertension (for example), you might qualify for the Standard Non-tobacco rate.
It might be shocking, but finding out who's recently purchased home is public information. Information on who bought or refinanced a home loan, the lender, the loan amount, and the address the loan is associated with is readily available at the courthouse. Companies will reach out to new homeowners at this time with offers like mortgage protection and life insurance.
Mortgage Life Insurance is not a smart move for most people. Premiums tend to be significantly higher than level term insurance products. A decent, level-term policy (20 or 30-year term) will provide you with sufficient protection.
While it's essential to spot the signs of a mortgage protection insurance scam, it's also important to know that most offers are legitimate. If you may be interested in this type of insurance, follow our top tips below as you fill out an interest card or make a phone call to ensure the company is legitimate and trustworthy.
If you just took out a mortgage, we'd advise you to look at term life insurance that would factor in your mortgage and income replacement to help care for those you'd leave behind. The typical recommendation is to have 8-10 times your income in a 20 or 30-year life insurance policy.
It's recommended for everyone with a family dependent on income to carry the option of a life insurance policy with a term. That's precisely the kind of policy for mortgage insurance.
Mortgage life insurance is more expensive than the guaranteed level of term insurance. It's usually offered as a "Non-Medical" insurance product. Non-medical means you're not required to take an exam (including urine and blood samples) to be covered. The process for applying is simple. It's quick and straightforward to complete, requiring only a handful of health-related questions. Mortgage Life Insurance is usually offered in just two categories: Standard Tobacco and Non-tobacco.
PMI is typically required on a conventional mortgage if your down payment is less than 20 percent of the home's value. Mortgage protection insurance, on the other hand, is entirely optional.
Mortgage protection insurance protects borrowers if they can no longer make their home loan repayments. Unlike insurance policies which are usually optional, LMI is often made mandatory by most lenders if the borrower can't pay a deposit of at least 20% of the property's value.
Private mortgage insurance will lower the risk to the lender of making a loan to you; it lets you qualify for a loan that you otherwise not be able to get. Typically, borrowers making down payments of less than 20 percent of the home's purchase price will need to pay for private mortgage insurance.