Mortgage Life Insurance
Mortgage life insurance is one of the most important life
insurance policies a person who owns a home can buy.
Since the ownership
of this home is probably the largest investment for most people it is
imperative that your investment be protected in the event of premature
death with a mortgage life insurance policy.
I want to take some time to
discuss alternative plans that can be used to do this.
What will happen to your family when you die? Will they be provided for? Life Insurance is the solution and we can help. Compare multiple quotes from Highly Ranked Carriers - Save up to 70%
Some Mortgage Life Insurance Ideas
Here is a company that helps you determine precisely which mortgage life
policy is best. You will find that you may need your mortgage term
policy for specific periods of time. Instead of 5, 10, 15, 20, 25, or 30
year term you can select 12 years or 17 years for example.
- Mortgage Insurance
What really is
mortgage insurance? The life insurance policy pays off the balance owed to the bank, or
mortgage company, in case of your premature death. Let us assume you have
a $100,000 25 year mortgage on your house. Let us also assume that
after 5 years you have a balance owed of $95,000.
figure is not as impractical as it sounds. Your principal decreases very
slowly in the early years. Back to our discussion...You now believe you
should take out some mortgage insurance because you now have a new
What you need is a 20 year
decreasing term policy
which would usually be sufficient if you should die anywhere within the
mortgage period. That is what mortgage insurance is all about.
Some people add the
waiver of premium benefit
in case they should become disabled for at least 6 months. The life
insurance company will pay the premium for them during their disability
even if it is for the rest of their lives. As an alternative to the
decreasing term policy some policy owners use a
20 year term policy.
If that person should die when there is only $50,000 owed for example, they have a little extra to put in the pockets of the
$50,000 to the bank and the other $50,000 to the beneficiary. There is
another alternative mortgage insurance plan you can elect to use if you have some extra cash
to play with.
- Mortgage Redemption And Cancellation Insurance
Here is how this works. Let us use the above situation as an
example. You are at the 5 year point just like in the mortgage life
What you do is buy a
variable universal life
variable life insurance
policy for $95,000, which is the amount owed on the mortgage. You are
putting out a lot more premium but if this works right you will be happy
about your decision.
If you die before the mortgage is paid off the
insurance policy will pay it off. As you may or may not know your whole
life or variable life policy accumulates
Here is the beauty of the plan...you get both mortgage life insurance
and mortgage redemption life insurance in one.
There are no guarantees,
but at some time between the 5 year point and the 25 year point the cash
value of your policy will be equal to the amount owed on the mortgage.
You can cash out the policy or take a loan on it and pay off the balance
of the mortgage. You would have redeemed your mortgage. You now own
your house free and clear. Now is that not a great idea or what?
Mortgage Life Insurance or Mortgage Redemption And Cancellation Insurance...you get a good deal. Don't you agree?
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