Here is the Easy Way to Protect Your Home Mortgage

 

COPYRIGHT FROM WIKIPEDIA

Are you worried about the future of your family and you want to provide strong protection for your home mortgage?  This is a common concern because mortgages are big obligations that should be faced by every family.  To make sure that you can bestow the property to your family without problem, you have to find a way to protect the mortgage. 

As head of the family, you are expected to provide for your spouse and children.  In case the head of the family dies early or unexpectedly, then there should be a way to protect the home.  One of the best financial instruments available for homeowners is term life insurance.  If you want to protect your asset, you have to secure the mortgage with term life insurance. 

You may be wondering why term life and not universal life insurance? Well, there are many reasons why term life insurance is the perfect fit to protect your mortgage.  

First of all, the time frame of term insurance is limited from 10 years up to 30 years.  So the expiration of your coverage will usually coincide with the pay off date of your home mortgage.  It gives you the opportunity to map out the coverage and to customize the expiration of your life insurance.  For most consumers who are adept in financial planning, term life insurance is normally the most preferred option. 

Second, term life insurance is very affordable and most people will not have any problem paying the premium.  Typically, you will only pay $28 per month premium for a total coverage of $250,000 with 20 years expiration date.  If you think about it, the total cost of protecting your home is only $1 per day.  With such measly amount, there is no need for you to radically adjust the budget of the household.  

It is easier to compare different term life insurance policies.  This is the third reason why this type of insurance is more advantageous for homeowners.  Because of its popularity, you can easily find different companies that offer term life insurance policy.  You can easily search an insurer online that can offer personalized policy coverage.  This is the best option to match the insurance to your specific needs.  

Fourth, your loved ones will be the direct beneficiaries of the insurance.  The proceeds will go directly to them instead of to the lender.  In a typical mortgage life insurance, the lender will claim the proceeds of the insurance.  With a term life insurance policy, your family has full control of the money.  Your loved ones will have the freedom to decide how they will spend the money.  They could pay off the mortgage, pay current debts, or supplement their income.  Because of the greater control that can be enjoyed by your family, you will know that you have provided good protection for them.  

For those who are still looking for ways to protect their mortgages, they should explore the big benefits of term life insurance.  This insurance is cheaper than the most and every family can afford it.  It provides sufficient protection for your family and can effectively protect your home mortgage.  

How Mortgage Protection Insurance Can Save Your Home And Provide For Your Family

COPYRIGHT FROM WIKIPEDIA

It happens all the time.  Out of nowhere catastrophe strikes an unprepared family when the breadwinner suddenly dies.  Left without an income, the family falls into dire financial straits and mortgage payments become harder to make.  Soon, the family cannot afford to pay the mortgage anymore and they eventually lose the house to foreclosure.  This reality has become more frequent in recent years in light of the housing market and recessionary economy.

The sad thing is that this scenario can be easily prevented with a mortgage life insurance policy.  Although the death could not be prevented, the result of the death could have.  The family would be able to keep the house because the insurance would pay off the mortgage balance amount.  With a term life insurance policy with a decreasing cash value that runs in balance with the mortgage principal, the debt will be paid off in the event of the insured's death.

Mortgage protection insurance is basically a term life insurance policy that is designed for a specific period of time for the purpose of paying off your mortgage or other large debt in the event of death.  The initial premiums are low-priced compared to other life insurance and you can get large amounts of coverage for little money.  Once the mortgage is paid in full if the insured does not die, the insurance stops and the contract is ended.

It is important to understand that mortgage protection insurance is not private mortgage insurance (PMI) that you may have been confronted with when you originally purchased your home.  There is a major distinction between the two.  Many people confuse them because they sound familiar and many think that PMI will pay off the mortgage so that their family can keep the house in case of the death of the insured.

However, this is not true.  Private mortgage protection is for the benefit of the mortgage company so that they, not you, will get the proceeds in the amount of the mortgage principal if you die.   PMI is for the benefit of the lender, even though you are making the premium payments, which allows your mortgage company to finance your home for a lower down payment.

Mortgage protection insurance, on the other hand, is for your benefit.  This is a separate insurance policy on your life that will pay off your mortgage for you so that your family can keep your home.  The mortgage company still gets the proceeds from the insurance in the amount of the loan balance, but the house is your family's, free and clear.

It is highly recommended to talk with your insurance agent about other provisions of mortgage protection insurance like a job-loss rider, which pays your mortgage payments if you become unemployed, in order to determine the level of protection that is right for you.  You owe it to yourself and to your family to evaluate mortgage protection insurance as an affordable method for ensuring that your family will not lose their home in case the unthinkable happens.