The last thing you'd want would be to die and leave a huge debt to your children, family or friends: mortgage life insurance plays on this fear to try to exploit a larger sum of money, with less flexibilty than a standard life insurance policy.
Mortgage life insurance policies declare your mortgage as being moot compared to your life, insuring that if you die, or are seriously disabled or injured you will be no longer responsible to your mortgage payments: the insurance agency will eat the losses and pay for your mortgage. Insuring that your family won't lose the home, or be stuck with regular mortgage payments that they can't afford.
Great idea, you say. Though, until one considers the value of a regular term-based life insurance policy it's rather uncomparable. Traditional-style life insurance policies are in most cases a significantly better deal than the pricey mortgage life insurance - to add to this point, many people have established disability insurance through their employer, thus unless one is self-employed it will not be an issue.
Mortgage life insurance can not be redeemed at cash value if that would be a more reasonable or reliable option - a traditional life insurance plan can (and, by default, will be). Mortgage life insurance is significantly less flexible or usable than other policies.
On top of that, mortgage life insurance seems to be, on average, about 30% more expensive. A $250,000 life policy for a relatively well taken care of human, with good eating habits, no smoking, etc. will run about $400 a month, where a similar priced mortgage insurance policy will run nearly $600 a month. On the other hand, mortgage life insurance typically doesn't require a health examination, which may make it more suitable for an overweight smoker, or an elderly person.
Once the mortgage is paid off, the mortgage life insurance settlement is valueless, where as, a traditional life insurance plan would still retain full value, regardless of how well you are doing financially.
Consider both, get quotes for both plans, then make your decisions. Don't jump on the heartfilled offer at first glance.
Adam X. Knife is an independant real estate investor, writer, and publisher of hundreds of content filled websites. His recent acquisitions have been in the direction of real estate related publications, seen in such sites as Arizona Investment Information [propertyarizona.info/] and Vacation Destinations [govacationing.info/].
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