What is mortgage life insurance? “Mortgage life is intended to protect the lender in case the borrower dies and can't repay the mortgage. The mortgage lender will be the beneficiary,” explains David C. Marlett, managing director at the Brantley Risk and Insurance Center at Appalachian State University. Mortgage life insurance (also called mortgage protection insurance, or MPI) is a type of term insurance (fixed in how long it lasts) and it ends when your mortgage is paid off. You would make a set monthly premium payment during that time to keep the policy in force. If you die during the term of the mortgage and MPI, your death benefit goes to paying off your mortgage, and your family...
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Life Insurance Vs Mortgage Insurance Whats the Difference? Essentially the main difference between Mortgage Life Insurance and a Standard Life Insurance policy is that the former has a pre-determined time frame (from the start to the end date of your repayment mortgage, for example, and the latter lasts for the whole of your life. Let’s take a closer look at them both… Mortgage Life Insurance Generally, mortgage life insurance tends to be cheaper than level term life insurance. F the later, the premiums are consistent throughout the length of the policy, but with mortgage cover, premiums can decrease over the length of the term, in parallel with the lowering of your mortgage....
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You have already paid over 20% towards purchase the property. However with the responsibility of your family on your shoulder, you are finding it quite strenuous to pay your equated monthly installments (EMIs), on account of which you start getting sleepless nights, this takes a toll on your health. You have not paid your EMIs for the past one year and the financial institution which grated you the loan confiscates your home. If only you had you had adequate cover you could have saved your dream home. Mortgage life insurance policy / mortgage title insurance/ Home Loan Protection Plan (HLPP) is a policy that covers the borrower against the non-payment of EMI in case of death of the borrower...
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You might, for example, want an all-singing, all-dancing policy that would pay out enough funds to cover everything from debts to everyday living expenses. Or you might prefer to take out a simpler, cheaper policy. A financial lifeline that would provide just enough cover to enable your family to pay off what’s likely to be their largest single outgoing: the mortgage. This is known as mortgage life insurance. Mortgage life insurance is a type of decreasing term life insurance policy. This means it lasts for a set number of years, known as the ‘term’, and the amount that would be paid out in the event of a claim reduces year-on-year in line with the amount outstanding on a repayment mortgage...
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In 2020, the number of homeowners increased by approximately 2.1 million. As Pew Research Center puts it, Americans have been on a homebuying spree. For many people, owning a home is part of the American dream. It can also be a major source of stress. Many factors can prevent a family from being able to make mortgage payments. When this happens, foreclosure becomes a real possibility. According to CNBC, COVID mortgage bailouts kept foreclosures at bay for some people, but now that those protections are ending, foreclosures are surging again. In the third quarter of 2021, foreclosure starts increased by 32 percent. Although foreclosure can be the result of many different events, a common...
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Whether you’re a new homeowner or you’ve been repaying your mortgage for a while, you can financially protect your home through a few different insurance options. If you’re a new homeowner, you may have recently received an offer of mortgage protection insurance in the mail. It may come in the form of a postcard, or even look like it comes from your lender. Both mortgage protection insurance (sometimes called mortgage life insurance ) and term life insurance can pay your mortgage if you die, but they aren’t the same. Here’s what they are and how to determine which one you should get. Term Life Insurance Explained Term life insurance is relatively straightforward. It’s an insurance policy...
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When shopping for a mortgage, you might have been told about mortgage life insurance. Chances are, you were left unclear about whether you actually need mortgage life insurance or whether there are other options. As a mortgage holder, you’ve joined the 63% of Canadian families that own their home, with all the joys and responsibilities that come with it. Including making sure your loved ones don’t need to worry about paying off your mortgage balance if something were to happen to you. In this post, we’ll cover the pitfalls of mortgage life insurance and why term life insurance can offer the same protection with more benefit to you. Mortgage life insurance is a popular type of life...
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Getting life insurance coverage for your mortgage payments can be a daunting task. Let’s start with the name. These products can be provided to you by: an independent life insurance broker a wealth of other sources and dealers Yet, the goal remains the same: to provide you with coverage and insure your mortgage and your life. Options however tend to vary and can get confusing at times, but something is better than nothing. When buying a home or starting a family, insurance coverage is a must in one way or another. Below we will break down some of the key differences to consider when evaluating between getting mortgage life insurance and life insurance. One thing to note before we...
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What MPI Isn’t Unlike MPI, PMI is a type of mortgage insurance that is provided by a private insurance company. It is still arranged by a lender, and like other types of mortgage insurance, PMI protects the lender, not you if you stop making payments on your loan. If you have a conventional loan and make a down payment of under 20% of the home’s purchase price or you’re refinancing with a conventional loan and your equity is under 20% of the value of your home, you will likely need PMI. On the other hand, MIPs pay for insurance to protect mortgage lenders in the event that the borrower doesn’t pay them back on an FHA loan. Although MIPs can add to a borrower’s...
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If you’re in the process of buying a home, you’ll have a lot to organise. But while you’re sorting utility suppliers and assembling cardboard boxes, it makes sense to consider life cover as part of the process. Whether you’re a first-time buyer, moving up the property ladder or securing a buy-to-let, here’s why you might want to get that financial protection in place. Mortgage protection as a first-time buyer If you’re new to home-buying and busy getting to grips with deeds and disbursements, it’s natural not to have the long-term picture front of mind. But this is often when people first take out life insurance. Some mortgage lenders will prompt you to look into life insurance when you’re...
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