Home, being family’s shelter, is somewhat a touchy property to anyone of us. We are dreadfully frightened just by contemplation of leaving our family homeless upon our untimely death.
The insurance industry understands our fear; hence they tailor a policy that is specifically designed to shelter our surviving families. This is what a life insurance mortgage is all about.
To refinance the mortgage even after your untimely death, life insurance mortgage will enable your family to retain your home as they move on from grief, or if desired sell the property for more financial gain. Likewise, if you are under a mortgage financing, your lender have probably asked you to take a life insurance to satisfy their fears of your or your family’s inability to pay any outstanding debts at the event of your early death. A mortgage policy is apparently a win-win solution for both parties.
There are two options for life insurance mortgage. These are traditional term mortgage life insurance and decreasing term mortgage life insurance. The former features a pay back to all the premiums that the policy holder paid the company. This is typically offered because companies put your premiums into investing yields until the payout is made. Your family can spend the reimbursed money just as the way they want. However, the insurance company gets the interest. On the other hand, decreasing term features a reduction of the amount of your premiums after the first five years of religiously paying up to such time that the mortgage is totally paid off. This is the main advantage of resorting to this kind of mortgage plan. The downside however is that you do not see any return of your premiums. Depending upon your capacity to pay, both mortgage policy plans enable you to choose terms of 5, 10, 15… to 30 years of coverage. The amount of coverage is per-determined in relation to the amount of your mortgage. The lender is primarily benefited and likewise receives the death benefits. The only benefit that the family gets is the retention of property.
Arguments pertaining to the essentially of a life insurance mortgage still exist. Some experts do not recommend this kind of purchase while others do. However, in some instances that you may be rejected from the usual life policies, then a mortgage plan is a good alternative. In such cases, it is still best to check the guidelines of these insurance providers. Although rare, some of these mortgage lenders/providers limit payouts to those with existing medical condition.
Even if you decide to go for a life insurance mortgage plan to protect the interest of your family, it is still highly recommended that you consult a financial adviser to look out for more viable options in accordance to your financial capacity. Anyhow, if you decide to go for a solo flight in the market, you can utilize the internet to estimate your quotes for premiums. There are just too many options available to you. Shop, compare and save!