You’ve heard that protecting your loved ones with life insurance is a beneficial approach. But when you purchased your house, you may have been solicited to purchase mortgage insurance from your lender, leaving you wondering if you need mortgage insurance, if you still need life insurance, or if you need both forms of insurance in your personal portfolio.
Mortgage protection insurance is a form of personal life insurance that covers your mortgage payments if you die. The purpose of this insurance is to help your family avoid needing to sell your home due to your lost income. Your premiums on this type of insurance remain level, but the death benefit decreases over time as you pay down your mortgage.
Life insurance is comparable to mortgage insurance because it provides a benefit to your family members upon your death. You can choose from term life insurance (you receive the benefit if you die within a certain number of years) and whole life insurance (provides a permanent benefit tied to the life of the insured).
The primary difference between mortgage insurance and life insurance is how the benefit can be used. With mortgage insurance, the benefit is paid out directly to your lender to pay off the balance on your mortgage. With life insurance, your family members can use the death benefit to pay for anything, including making mortgage payments.
You want peace of mind, flexibility, and options when it comes to planning for the future and taking care of your family. Before you say yes to mortgage insurance, come and talk to us about your options for life insurance. Our goal is to protect your interests, your wealth, and your family with the right insurance strategy for your situation, and we are always here to answer your questions and provide additional guidance.