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Can life insurance proceeds be used to pay off a home mortgage?

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2009-03-30 13:53:36
2009-03-30 13:53:36

Yes, life insurance proceeds can be used to pay off a mortgage.

Proceeds from a life insurance policy can be used for any reason.

The proceeds are paid to the beneficiary, free from federal income taxes.

If the policy is a mortgage protection policy it usually pays the money directly to the mortgage holding company.

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Related Questions


Mortgage Protection Life Insurance is a good idea if you want to protect your mortgage. It pays the outstanding balance of your mortgage if the mortgagor (insured person) dies. Mortgage protection life insurance coverage is usually in the form of decreasing term insurance, with the amount of coverage decreasing as the outstanding mortgage debt decreases. Usually, the proceeds of the mortgage protection life insurance are paid to the beneficiary, which is the mortgage company holding the mortgage loan. Some people choose instead to buy level term life insurance in the amount of the mortgage, and the benefits are paid to the insured's beneficiary (family member), who in turn can use the proceeds for any reason, including to pay the mortgage.


Get StartedInsurance proceeds on the life of a


The purpose of mortgage protection life insurance is to protect the home from being lost in the event the mortgagee passes away. The life insurance will pay off the balance of the existing mortgage to the finance company.


No. For that kind of benefit you need mortgage insurance or a life insurance policy.No. For that kind of benefit you need mortgage insurance or a life insurance policy.No. For that kind of benefit you need mortgage insurance or a life insurance policy.No. For that kind of benefit you need mortgage insurance or a life insurance policy.


Homeowners Insurance covers losses or damages related to your home. Maybe your Friend is recommending the life insurance policy in case you die before you pay off the house. Your family could then use the life insurance proceeds to pay off the balance of the mortgage on the house in the event you die.



most of these operations have been closed or shut down, although several life insurance companies, such as Prudential Home Mortgage and Metropolitan Life, have had success in the mortgage banking segment


Mortgage insurance is mortgage insurance, usually sold to the applicant at the closing of the purchase of a house. At the title company. It has nothing to do with life insurance, per se, because upon death of the insured, the LOAN is paid off. The survivor RECEIVED NO CHECK.Life insurance, on the other hand, has nothing to do with mortgage insurance. Upon death of the insured, the SURVIVOR, not the title company, receives a check for the amount of the death benefit. You cannot find the word mortgage on what is euphemistically called by the agent "MORTAGE LIFE INSURANCE".The same answer applies, in general, to the question what is term life insurance.Mortgage life insuranceMortgage life insurance is a form of decreasing term life insurance. It pays off your mortgage if you die. Mortgage life insurance is often confused with Private Mortgage Insurance (PMI). You buy mortgage life voluntarily to protect your survivors from having to make the monthly payments. But with Private Mortgage Insurance, lenders require you to buy a policy in order to protect them (the lenders) against the possibility that you will default on the debt.Mortgage life insurance is a life insurance policy that one would take out on themselves or another person involved in a mortgage take out on a home or business so that if they should die the mortgage can be paid off. As the amount of the mortgage is paid down the amount of life insurance received is lowered. This type of life insurance will never pay more than the amount of the remaining mortgage.Given the relatively low cost of term life insurance on a healthy person, one might consider buying a decreasing term life insurance policy at the inception of the mortgage, rather than as part of the real estate transaction. The trick is to correlate the period of the decreasing term with the amortization of the mortgage.


Mortgage life insurance provides security for your family in the event that you were to pass away. It ensures that if that does occur and you have mortgage life insurance then your repayments will be covered.


No. Not unless there was some type of insurance in place to that effect, either mortgage insurance of a life insurance policy.No. Not unless there was some type of insurance in place to that effect, either mortgage insurance of a life insurance policy.No. Not unless there was some type of insurance in place to that effect, either mortgage insurance of a life insurance policy.No. Not unless there was some type of insurance in place to that effect, either mortgage insurance of a life insurance policy.


Usually, life insurance proceeds are free from federal taxes. If the beneficiary is an individual person/persons, the proceeds of a life isnurance policy are tax-free. If the beneficiary of a life insurance policy is the "Estate" of the insured person, the proceeds may be subject to estate taxes.


Are you referring to mortgage insurance that is added to your monthly payment in case of default? Anyone with an ltv at 80% or greater. Or are you talking about mortgage life insurance? These are two very different things. You only need mortgage life insurance if you do not already have a life insurance policy that is adequate to pay off the mortgage.


"Mortgage payment protection insurance is essentially a form of life insurance. If something happens to you, your mortgage payments will be covered under the terms of your insurance plan. This insurance is definitely not necessary, and, in fact, a more standard plan like term life insurance may get you a better value for your dollar."


Proceeds are the payments of the benefit. So in other words with Life Insurance it is the death claim amount paid out.


There are several options available online for websites providing information, quotes and the ability to apply online for mortgage life insurance. Make sure you understand the difference between mortgage protection insurance, and mortgage life insurance.


No. Life insurance is paid the the beneficiary named in the policy, your creditors have no claim against the insurance proceeds EXCEPT if the proceeds are paid to your estate.


The Bankruptcy Court has every right to claim the proceeds of a life insurance policy once you are declared by them as insolvent.


The type of life insurance that is more than often used as mortgage insurance is known as decreasing term.


Mortgage Insurance protects the LENDER in the event of a foreclosure and will pay any $$$ loss to them....no protection at all for YOU. Mortgage Life will pay-off your mortgage in the event YOU or the covered person dies.


If there is a named beneficiary the life insurance proceeds bypass probate and the beneficiary will receive the money. If none is named, the proceeds are paid over to the estate. If the proceeds are paid over to the estate the debts of the decedent must be paid before any assets can be distributed to the heirs.


Most banks will add a small fee to the mortgage to cover life and accidental insurance. Another option is for the homeowner to receive their own mortgage insurance quote from agencies such as Sunlife.


No. Life Insurance proceeds to beneficiaries are not taxable.


Credit life insurance, Mortgage insurance, or decreasing term insurance.


This depends on what you mean by mortgage insurance. If you are talking about products like PMI (Premium Mortgage Insurance) look on your escrow billing and it will be listed. If you are talking about a life insurance policy that would be either through credit life with your mortgage company or separately through an insurance company.


You can buy special life insurance which pays off your home mortgage if you die.Maybe that is what you meant by "insured home loan".



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