Comments on: Do You Need Mortgage Life Insurance?

By: mspaap

mspaap — Fri, 20 May 2011 05:43:56 +0000

My uncle recently passed and Mortgage Life Insurance will pay off his home so his family doesn’t have to worry about making payments.

Although its true the family won’t see the money because it will be paid to the lender, the family has the option of living in, or selling the home for a profit.

By: K Yothers

K Yothers — Wed, 04 May 2011 16:21:44 +0000

Good article. Just what I was looking for. Good discussion of pros and cons of this type of insurance.

By: Ryan

Ryan — Tue, 03 May 2011 13:55:58 +0000

Anita, if you can continue making your mortgage payments then nothing happens. This insurance is designed to protect individuals who would have a difficult time making mortgage payments if one member of the family were to pass away. In that instance, the mortgage would be paid off and you wouldn't have to worry about the mortgage payments any longer. If you can no longer make the mortgage payments you would have to forfeit your house and the equity in your house to the lender, and yes you would lose all your equity. That said, in most cases, a standard term life insurance policy is a better option for most people and it is something I recommend everyone look into. Here is a helpful article: How Much Life Insurance Should You Buy?.

By: Anita

Anita — Tue, 03 May 2011 11:36:20 +0000

What happens to your home equity if you die without mortgage life insurance? Does the bank get it all or can the proceeds from any term life insurance policy be used by your beneficiary to pay off the remainder of the loan even if they are not one of the homeowners? The equity in my home is more than the amount owed and I want to make sure it is protected.

By: Joanne

Joanne — Sat, 23 Apr 2011 00:58:33 +0000

This is an interesting discussion to me because I am considering buying mortgage insurance protection on a second home. I would love to have some advice. Consider this: If a 60-ish couple with two grown children own one home free and clear and a second home that has a $300,000 mortage, does it make sense to get mortgage insurance on the second home? Is it true that such a policy would pay the outstanding mortgage no matter which of us might die? Thanks for any comments!

By: Ryan

Ryan — Fri, 03 Dec 2010 02:45:06 +0000

Hi Dan, that would be my assessment of mortgage life insurance as well- it has it's place, but there are often better options for most people. Here are my thoughts on Return of Premium Term Life Insurance.

By: Dan

Dan — Thu, 02 Dec 2010 17:12:09 +0000

Great post! It seems like mortgage life insurance is not a good option for anyone who is insurable elsewhere. They now have someting called “return premium mortagage insurance”. They claim they’ll return all the premium paid if you keep the policy for the entire term, which can be between 20 & 30 years. Ryan, have you heard of this type of policy? If so, what’s your opinion on it? Thanks!

By: Ryan

Ryan — Fri, 26 Mar 2010 02:30:03 +0000

That about sums up my opinion, Kirk. I think most people are better off with a term life policy if they are insurable. It’s coverage that remains at the same level for the duration of the policy, not a decreasing benefit for a static payment.

When my wife and I chose our life insurance coverage, we looked at all possibilities, including mortgage, college tuition, living expenses, etc. Covering only one aspect of your financial life just doesn’t make sense.