Mortgage Life Insurance - What is mortgage life insurance and do I need it?

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Many lenders and insurance companies offer mortgage life insurance. Mortgage insurance is most often decreasing term (the face amount declines over time) insurance structured to pay your mortgage off if you die. For most homeowners, this is a lousy deal. In most cases mortgage life insurance is very expensive when compared with basic competitive level term life insurance..

If you want to make sure your heirs have enough money to pay your home-loan off when you die, it is often much cheaper to purchase term life insurance, payable to your selected beneficiary and with a level death benefit equal to the number of years your mortgage will last. In the event of an unexpected death there will be more than adequate funds to pay the mortgage. Compare costs and you should find lower rates and much greater flexibility when using a personal level term life insurance policy ( if it was decided not to pay off the mortgage, the insurance policy funds would be availabe to the beneficiary for whatever purpose).

You should consider buying mortgage insurance if you're in poor health, your medical problems prevent you from getting an inexpensive term life policy, and the insurer who offers the mortgage life insurance does not require that you take a physical examination. Otherwise, you should probably skip mortgage insurance and use personal life insurance for the same purpose.