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Mortgage life insurance is one of the most important life insurance policies a person who owns a home can buy. Since the ownership of this home is probably the largest investment for most people it is imperative that your investment be protected in the event of premature death with a mortgage life insurance policy. I want to take some time to discuss alternative plans that can be used to do this.
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Here is a company that helps you determine precisely which mortgage life policy is best. You will find that you may need your mortgage term policy for specific periods of time. Instead of 5, 10, 15, 20, 25, or 30 year term you can select 12 years or 17 years for example. * Mortgage Insurance What really is mortgage insurance? Mortgage life insurance pays off the balance owed to the bank or mortgage company in case of your premature death. Let us assume you have a $100,000 25 year mortgage on your house. Let us also assume that after 5 years you have a balance owed of $95,000. Incidentally that figure is not as impractical as it sounds. Your principal decreases very slowly in the early years. Back to our discussion...You now believe you should take out some mortgage insurance because you now have a new baby. What you need is a 20 year decreasing term policy which would usually be sufficient if you should die anywhere within the mortgage period. That is what mortgage insurance is all about. Some people add the waiver of premium benefit in case they should become disabled for at least 6 months. The life insurance company will pay the premium for them during their disability even if it is for the rest of their lives. As an alternative to the decreasing term policy some policy owners use a 20 year term policy. If that person should die when there is only $50,000 owed for example, they have a little extra to put in the pockets of the beneficiary. $50,000 to the bank and the other $50,000 to the beneficiary. There is another alternative mortgage life insurance plan if you have some cash to play with. * Mortgage Redemption And Cancellation Insurance Here is how this works. Let us use the above situation as an example. You are at the 5 year point just like in the mortgage life insurance example. What you do is buy a whole life, variable universal life or variable life insurance policy for $95,000, which is the amount owed on the mortgage. You are putting out a lot more premium but if this works right you will be happy about your decision. If you die before the mortgage is paid off the insurance policy will pay it off. As you may or may not know your whole life or variable life policy accumulates cash value. Here is the beauty of the plan...you get both mortgage life insurance and mortgage redemption life insurance in one. There are no guarantees, but at some time between the 5 year point and the 25 year point the cash value of your policy will be equal to the amount owed on the mortgage. You can cash out the policy or take a loan on it and pay off the balance of the mortgage. You would have redeemed your mortgage. You now own your house free and clear. Now is that not a great idea or what? Mortgage Life Insurance or Mortgage Redemption And Cancellation Insurance...you get a good deal. Don't you agree?
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∙ 15y ago
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Does a standard homeowners insurance policy cover the death of the insurer?
No, Homeowners Insurance does not provide the coverage of a life insurance policy.
Does a homeowners insurance cover death of your child in the home?
No. Homeowners insurance only covers physical damage to the home and contents and liability risks.
Does homeowners insurance continue after policyholder dies?
generally yes - to the legal representative - check conditions "death" for specifics or contact your agent/insurer.
Does homeowners insurance cover the cost of cleanup after an unattended death?
No. Your Homeowners insurance is "Property" insurance. It covers property damages caused by certain covered Perils such as Fire, Wind, Hail, Lightning, Fire etc. You will not find coverage on your Home Insurance Policy for death or related expenses.
Does homeowners insurance continue after the owners death?
Homeowners insurance will continue after an owners death. The Homeowners insurance policy will typically be paid for by the executor of the estate and become his or her responsibility.
Does homeowners insurance cover a death of a stranger in your house?
No, Hopefully the stranger had a life insurance policy. Homeowners insurance does not provide life insurance or accidental death benefits.
Does homeowners insurance cover murder?
Homeowners insurance typically does not cover intentional acts like murder. However, it may provide coverage for damages resulting from a crime scene cleanup or property damage related to the incident. It's important to check the specific policy details or consult your insurance provider for more information.
Is there any way to get accidental death insurance to pay in the event of suicide?
No. No insurance policy covers death in case of suicide.
Accidental life insurance covers death by homicide?
Your life insurance policy should contain a provision that stipulates if the policy covers death by homicide. It really varies from policy to policy, depends on the insurance company, etc.
If there are two different life insurance policies which insurer pays?
A life insurance policy is a contract. You can have as many as you want. They all have to pay out on the death of the insured.
Compare insurance and mutual fund?
The fundamental difference is that insurance involves the process of an entity (the insurer) assuming the risk of loss of another person or entity. In other words, in return for the payment of money (the premium) the insurer agrees to pay that which you may be legally liable for. Insurance comes in various varieties, for example, property insurance or health and life insurance. Each covers different kinds of risks, as outlines in the insurance policy, which is a written contract between the insurer and the insured (the person or entity insured). There is a great deal more to the concept of insurance (for example, life insurance covers the risk of death), but for the sake of brevity, these are the basics. Both the terms of the policy (what is covered and under what circumstances) and the premium are regulated by the insurance regulatory authority of the state in which the insurer transacts business. In contrast, a mutual find is an investment vehicle. One invests money in the mutual fund, which in turn, invests in stocks and bonds or other income-producing assets. The goal of the investment is to produce income or to increase the value of the investment for the investor.
What is the difference between term life insurance vs whole life insurance?
A term life insurance is during the insurer's life only. When he or she is gone, then the insurance ends. The whole life insurance on the other hand has what the term life insurance covers plus more.
