Mortgage term insurance is the type of life insurance that every
homeowner knows about.
The real estate agents certainly let them know about it. Some of the smart ones are even licensed agents. They make a little extra money selling these policies.
These term insurance policies pay off your mortgage balance upon your death.
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Mortgage life insurance is one of these things that everyone who buys
a home should own. Here is how is works. When you buy a home the bulk
of the cost is usually carried by a bank or mortgage company.
Let us suppose you bought a home for $300,000. Let us also suppose you make a down payment of 20%. You have decent credit so the bank lends you $240,000. You had paid down $60,000.
Each month you make your payments. In the initial years the majority of your payment goes to pay interest. As time goes by your mortgage balance decreases as more of your payment is applied to principal.
At the time you bought your home you wisely bought a mortgage term life insurance policy. This policy had a death benefit of $240,000. As your mortgage balance decreases the death benefit of the policy also decreases.
This policy is really designed to keep abreast of your mortgage so that upon your death the mortgage is paid off in entirety. The premiums for this policy never decrease.
This is very cheap life insurance but it guarantees that your loved ones will get a home free and clear when you die.
Some people prefer to use a level term policy to cover their mortgage. If the mortgage is for 20 years they buy a 20 year term policy. If the mortgage is for 25 years they buy a level 25 year term life insurance policy.
If death occurs in the first year the mortgage is paid off and
that is it. If you should die after 5 years or 10 years, for example,
then there is an amount that is more than the mortgage balance payable
by the life insurance company.
The extra amount goes to the beneficiary of the policy.This would come in quite handy for most people.
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The idea of no exam life insurance is by no means new. It is a little more liberal than it used to be and we have a new generation embracing the idea. There are many variations to this policy.
The 20 year term life insurance policy can be effectively used in oh so many situations. We will look at some of them but first let us define what this policy is all about.
The 10 year term life insurance is one of the simplest and most easily explained types of life insurance.
Let us take a look at the 10 year 20 year and 30 year term life insurance policies.
There are many pages on this website on term insurance details and how it works. What I want to do on this page is give you a basic and general outline of this policy.