Frequently asked questions about mortgage life insurance
Insurance helps to cover surprises in life and unforeseen accidents. We have no way of knowing how long we will live or what may happen tomorrow. Therefore, many of us turn to insurance to help smooth out emergencies or at the very least soften the blow monetarily. Using FAQs about mortgage life insurance (MLI) can help to cut out the confusion and allows you to make sound decisions about purchasing this insurance for you and your family.
Answers to mortgage life insurance questions
Q: Does everyone need mortgage life insurance?
A: Not necessarily. Only people still carrying a mortgage on their home need to consider this type of insurance.
Q: What is mortgage life insurance?
A: If you purchase a policy for MLI, the policy will pay off the mortgage on your home if you should die. Understand that this type of policy basically pays off the balance owed on the mortgage to your mortgage lender. If your family will need money for daily living expenses to cover the loss of your income, it is a good idea to consider purchasing term life insurance in addition to a MLI policy.
Q: Where can I purchase MLI?
A: Mortgage life insurance can be purchased from insurance companies or lenders at the time your become approved for your mortgage loan.
Q: What if I cannot qualify for term life insurance, can I still get MLI?
A: Yes you can. If you have pre-existing health conditions or have been turned down for term life, you can still be approved for MLI.
Q: Does mortgage life insurance only pay out if I die?
A: MLI policies are designed to pay out upon the death of the insured person. However, some insurance companies also cover chronic or debilitating diseases in addition to death. Ask your insurance agent what the full coverage includes and read the contract carefully.
Little known secrets
Most people are not aware that taking out mortgage life insurance could make the difference in getting their loan approved. To make the bank feel more secure about loaning money for a home, they may require purchasing MLI when a buyer puts down less than 20 percent. Consider the advantages of an MLI policy that could help your family financially during a tough time.