How does mortgage protection term insurance differ from other types of term life insurance?

2/19/2016

The face amount under mortgage protection term insurance decreases over time, consistent with the projected annual decreases in the outstanding balance of a mortgage loan.

Most people change mortgages many times in their lifetime.* The need for a level death benefit over a longer time makes more sense.

Mortgage protection policies are generally available to cover a range of mortgage repayment periods, e.g., 15, 20, 25 or 30 years. Although the face amount decreases over time, the premium is usually level in amount.

“With level term premiums at an all time low and the new term to age is 120 years, there are much better options than mortgage protection term insurance” -Bill Zimmer

Based on market conditions, it may be in your widows' best interest to take the money and invest it elsewhere versus paying off a low interest mortgage.

4 Comments

Helen link

11/7/2018 02:58:16 am

I had a policy that paid my monthly amount when I was long term ill. I thought it was a mortgage protection policy but I am now thinking it was not. Do you know what type of policy would cover both scenarios?

Max borhan link

4/3/2019 02:06:03 am

The first one we mentioned already: Mortgage protection insurance only covers your mortgage, while regular term life insurance covers all of your expenses (up to your coverage limits). The largest difference is who the funds get paid to upon your death.

Robert Williams link

8/28/2019 06:31:58 am

All in all a good article. If you are the primary income earner in your household or if your parents, siblings, or anyone else depends on your income. Life insurance is the best way to get the most bang for your buck. It’s the type of <a href="https://www.iciciprulife.com/life-insurance.html">life insurance</a> with the cheapest cost per thousand in comparison to universal or whole life, or anything in between. Life insurance is an insurance that pays a lump sum upon your death, and the proceeds are typically 100% tax-free.

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