Is Mortgage Life Insurance Essential?

So, you are considering buying a house or have bought a new home which is one of the biggest investments you will ever make, so it is essential to have the right policy in place to protect you and your home. It should be your top priority. It is the easiest and the most practical way of knowing if something did go wrong you would be assured that your family would have ample money to maintain and survive their lifestyle on a day to day basis. When taking out a mortgage it is important to take into consideration how you will pay off the mortgage if you didn’t have the income due to illness or any other reasons. Mortgage insurance is required and is essential if you own or you are thinking of buying your own home.

What is Mortgage Insurance?  

Mortgage insurance is a cheap life insurance policy that is designed to pay off your mortgage if you die. The policy runs the same time length as your mortgage, and the premium cost that you pay each month depends on the size of the mortgage and whether you are a smoker or a non-smoker, your age, and how healthier you are. Generally, the level of cover will come down during the term to reflect the fact that the mortgage has been paid off. If your mortgage is fully paid up to date your mortgage premium payments will reduce.

Benefits of mortgage insurance  

Here are some of the main benefits of obtaining a mortgage protection insurance policy.

You can choose your beneficiaries and you own the contract  

If you buy your mortgage insurance policy from an insurance company you can name the beneficiaries that you want and you also own the contract. Compared to buying off the bank they are the beneficiary and own the contract also. The beneficiary can choose to pay his or her debts, repay the loan, or use the benefit for someone else.

Your premium is guaranteed and it is fixed  

The mortgage insurance cover amount that you buy from an insurance company will stay the exact same for the duration of the loan. Compared to a bank the mortgage insurance cover amount will go down as the balance of your mortgage decreases while your premium will stay the same.

Your mortgage insurance can be converted  

Your mortgage insurance can be converted over to permanent life insurance by your insurance company if required throughout the loan term. If you do decide to convert your insurance over with your insurance company, your premium may go up and you will not have to undertake a medical exam. In the event of your death, the policy will remain in place.

All your insurance contracts in one place  

All your credit insurance contracts can be linked to the exact same policy. As a customer you can have all insurance policies under the same contract so home, mortgage loan, auto, and more can be made as one payment. This way it will make your life a lot easier.

You won’t have to shop around anymore  

Purchasing mortgage protection insurance from an insurance company rather than a bank this way you won’t have to shop around for the duration of the term. In addition, the cost of your premium will not increase over the years. If you get a mortgage with a bank you may be required to negotiate new mortgage insurance and your premium amount will be higher based on your age and any changes to your health in the meantime.