Term Life Insurance – A Better Option to Mortgage Life Insurance

A mortgage life insurance is a type of insurance policy that is designed to pay off your mortgage in the event of your untimely death. The insurance company will pay off any outstanding balance left on your mortgage leaving your family debt-free. Typically, in this type of insurance, as your mortgage decreases, so does the amount of insurance.

How Mortgage Life Insurance Works

When mortgage insurance begins, the coverage must equal the outstanding amount on the repayment mortgage. The policy’s termination date must coincide with the date scheduled for the final payment on the repayment mortgage. The insurance company calculates the annual rate at which the insurance cover should decrease in order to reflect the value of the capital outstanding on the repayment mortgage. Some mortgage policies will include provisions for payouts if the policyholder is diagnosed with a terminal illness from which he or she is expected to die within a year of being diagnosed.

Purchasing mortgage life insurance is not such a good idea. In fact, it’s hard to find any mortgage life insurance which offers good value. The main reason why purchasing this type of insurance is a bad idea is because currently, traditional mortgage life insurance rates are not as competitive, as say, most term life rates.

Reasons why mortgage life insurance is not a good idea

• Mortgage life insurance policies are generally expensive to begin with. As time goes on, these policies become even more expensive. The premiums stay level throughout the term period but the amount of death benefit becomes less at the same rate as the debt does. The cost for coverage starts out high and the policy gets worse over time in terms of the amount of death benefit.
• Mortgage life insurance will only re-pay your mortgage if you should happen to die with the insured period. This may leave your surviving spouse debt-free, but mortgage insurance will not address any other income needs of your family which may arise due to your sudden demise. Most families have financial needs that go beyond payment of mortgage.

Term Life Insurance Makes More Sense

• The death benefits that come from a term life policy can address any kind of debt and other financial needs your family may face.
• You can take out term life policies for a term period of 10, 20, 25 or even 30 years. If you have already finished payments on your mortgage, you may want to review your term life policy to reflect those changes. Or, you may want to use the coverage for other future expenses you may have, such as education fees of your children, or a retirement plan for your spouse. With term life insurance, you have the freedom to change the objectives of your insurance policy as your life situation changes. Mortgage life insurance does not allow you this type of freedom.
• Underwriting for term life policy is cheaper. If you’re in good health, taking a term life policy could work out beneficially for you. For example, if you saved $100 on annual premiums by taking up a term life policy, rather than mortgage life insurance, this will add up to a savings of $3000 at the end of 30 years. It is always best to get an insurance policy with guaranteed lower rates than a mortgage life insurance policy.

More People Choose Term Life Insurance over Mortgage Life Insurance

It is more common to see people purchasing term life insurance with return of premiums options instead of mortgage life insurance. At the end of the term, all the premiums you have paid are refunded to you, tax-free.

Another better option to mortgage life insurance is a level term life policy. A level term life policy will give you the benefit of paying level premiums throughout the term period. And unlike mortgage life insurance, your death benefits will not decrease during the full term period.

Finding the Best Deal on Term Life Insurance

You can get the best term life insurance at the most affordable price by using online life insurance providers. Many of these not only offer the best term life insurance quote but also free professional services to help you identify policies that suit your needs the best and make meaningful recommendations. Look for online life insurance providers who are BBB-accredited and are affiliated with the best life insurance carriers in the industry. They will provide you with instant life insurance quotes which you can use to compare prices and products. This will help you make an informed decision and land you with a policy that best suits your needs at the most affordable price.

About the Author

About AccuQuote:
AccuQuote is a leader in providing term life insurance quote to people across the United States. In 1986 it began operating with a single goal: to make the process of buying term life insurance as easy as possible for its customers. Their experienced professionals consistently deliver the most affordable term life insurance rates by comparing thousands of life insurance policies from dozens of top-rated carriers.

Life Insurance Facts : Good & Bad Term Life Insurance Policies

Calculated Industries 3405 Real Estate Master IIIX Real Estate Finance Calculator $33.49 Calculate complete PITI payment solutions amortization combo loans ARMs rent vs. buy comparisons and much more. Ideal for new agents and professionals who dont require buyer qualifying functions….

Zip Hot Wax Cream, Hair Remover – 7 Oz $21.49 The Mininimum EXP date on product:1year.DESCRIPTION: Zip Hot Wax Cream, Hair Remover – 7 Oz.MANUFACTURER:LEE PHARMACEUTICALS.INDICATIONS:For All Body Use: Legs,Face,Bikini Line,Underarms. Contents: are Wax Block and Wood Spatula.INGREDIENTS:rosin, beeswax, calcium carbonate, magnesium carbonate.DIRECTIONS:Your skin will be bare and smooth for weeks after just one application of Zip Wax. With repea…

DHS Shampoo – 8 Oz $7.62 SKU NUMBER: 72074.The Mininimum EXP date on product: 1Year.DESCRIPTION: DHS Shampoo – 8 Oz.MANUFACTURER:PERSON & COVEY.INDICATIONS:Provides a luxurious lather which gently cleanses the hair and scalp and is especially formulated for pH balance.INGREDIENTS:Purified Water; TEA-Lauryl Sulfate; Cocamidopropyl Betaine; PEG-8 Distearate; Benzyl Alcohol; Cocamide MEA; Polyquaternium-22; Citric Acid; Frag…

Telfa Non Adherent Dressing Pads 2 X 3 – 100 $10.34 SKU=943373The Mininimum EXP date on product:1 yearMANUFACTURER:KENDALL HEALTHCARE. INDICATIONS:Absorbent cotton pad. Superior “Ouchless” TELFA dressing won’t disrupt healing tissue by sticking to wound. Each sterile dressing individually wrapped in open envelope. Ideal as primary dressing for lightly draining wounds. Bonded on both sides with perforated non-adherent film, can be cut to any shape w…

TurboTax Home & Business Federal + State + Federal efile 2009 $42.89 TURBOTAX HOME & BUSINESS WITH…

Garmin nüvi 265W/265WT 4.3-Inch Widescreen Bluetooth Portable GPS Navigator with Traffic $135.00 …

Panasonic VIERA TC-L32C3 32-Inch 720p LCD HDTV $399.00 32″ VIERA HD (720p) LCD TV 32″ Class VIERA® C3 Series LCD (31.5″ Diagonal)IPS Alpha PanelDelivers a 178° wide viewing angle for bright and clear images from virtually anywhere in the roomVIERA Image ViewerView your digital photos on your VIERA HDTVFine Black PanelReduces panel reflections to sharpen images and decrease glareVIERA LinkLets you control your VIERA HDTV and other Panasonic VIERA Lin…

Panasonic VIERA TC-L32C5 32-Inch 720p LCD TV $319.99 Get More Excitement Out of Gaming – Game ModeGames are much more fun when there’s no lag in operation. VIERA automatically chooses settings that provide the optimal image, so you get super-fast response and no delays. Even dark scenes with delicately rendered details are beautiful and easy to see. Game mode makes all of the game apps on VIERA Connect even more fun to play.Play Various Types of For…

A Beginner’s Guide to Buying Life Insurance (Money Matters) $1.99 No one ever wants to think about their own death, but planning for it carefully can make a real difference financially for the family you may have to leave behind. It will be difficult enough for your family having to cope with bereavement without adding money problems to the situation.If you have a family or people dependent upon you for support, one of the most loving things you can do for them …

Real Estate License Exams For Dummies $9.39 Every year, thousands of Americans make the leap to an exciting, rewarding new career in real estate. If real estate is your dream career, passing the real estate license exam is the first step to success. With real estate basics and unbeatable study tips, Real Estate License Exams For Dummies will help you pass the test with flying colors — and get your new career off to a great start.If you…