When you buy a house, the loan you choose will determine how long you will be making payments. But what will happen to your mortgage if anything unexpected happens to you, like death or disability? This is where mortgage protection insurance comes in.
When a policyholder dies before paying off a mortgage, mortgage protection insurance pays off the balance. Other than that, mortgage protection insurance also helps cover costs if you become disabled and cannot work because of an accident or sickness.
Most plans for mortgage protection insurance work like standard life insurance. You'll have to pay a set amount to your insurance company every month to ensure your protection is up to date. If you pass away, the insurer will provide payments to your dependents equal to the money required to pay off your mortgage.
Mortgage protection and traditional life insurance share many similarities; however, there are also several differences between the two types of policies.
Your mortgage company is more likely to benefit from mortgage protection insurance than your loved ones. A term life insurance policy typically provides a cash benefit to beneficiaries upon the policyholder's death. But in mortgage protection insurance, your lender will receive the funds instead.
Many factors go into determining your monthly premium for term life insurance. You'll be subjected to medical exams and background checks. But with a mortgage insurance policy, you might not have to go through those.
Lastly, there are different rules for mortgage insurance. For example, most mortgage protection insurance policies have a clause that says any remaining death benefit must be used to pay down the mortgage. So, as time goes on, the amount of interest you pay on a loan will decrease. On the other hand, the value of your policy decreases.
This is in contrast to life insurance policies, which pay the same amount no matter how long the policy lasts.
When you buy a house, the loan you choose will determine how long you will have to make payments. But if something unexpected happens to you, like death or illness, what will happen to your mortgage? The answer is mortgage protection insurance!
At Roper Insurance Services, we do our best in making sure that our clients are well-protected with affordable and comprehensive policies. We make sure to go the extra mile to help you with your needs. To learn more about how we can help you, please contact our agency at (828) 697-6709 or Click Here to request a free quote. Topics and coverage discussed in this article are not guaranteed, consult with your agents to determine what your policy does and does not cover. We are more than happy to help!