How Life Insurance Can Help You Pay Your Mortgage
In addition to paying for your funeral expenses and giving your loved ones a comfortable sum to live on, life insurance can also help you pay off your mortgage in the event of your untimely death. By choosing mortgage life insurance, your payout will go directly to your lender, ensuring that there’s no squabbling over money or unpaid balances. This type of insurance does not absolve your mortgage, so if there are any lingering fees or costs, the debt will fall to your next of kin.
However, keep in mind that the payout for mortgage life insurance decreases overtime as you pay off more of the mortgage. While your policy might start out covering all of your $500,000, in 20 years, it might only pay off the remaining $50,000 balance. For some people, this might not be entirely cost efficient, so it’s important for you to weigh the costs of insurance against your mortgage timeline. If you have a low balance as well as an affordable mortgage payment, you might look into normal life insurance policies instead.
Mortgage life insurance coverage is determined based on a few different factors. Your insurer will look at how much you have left on your mortgage, your current age, and your overall health when determining your premiums. With various life insurance options from Health IQ, you’ll have no problem finding the mortgage life insurance that meets your needs as a homeowner. To learn more about mortgage life insurance and test your existing knowledge, take the quiz below.