Losing someone we love is stressful. Without she/ he, it seems like losing a roof over head. If you have family members who are your dependants, it importantly needs to consider the mortgage life insurance. A mortgage life insurance is a type of life insurance which is particularly designed to pay the mortgage if the death comes to you. This kind of mortgage gives you as the life insurance owner a piece of mind that your dependants will get the warranty of life expenses after you leave. Your dependants will receive amounts of financial support to meet their needs.

Types of Mortgage Life Insurance Policy

Life insurance companies provide three kinds of mortgage life insurance: level term, decreasing term, and whole life of mortgage. The policy will depend on each individual circumstances and the payment you select. For more details about each kinds of mortgage life insurance, please read the following information.

  1. Level term mortgage life insurance

Level term mortgage life insurance is the term when your sum which is assured remains fixed for a particular period of time. If you take a policy at $150,000, for instance, this is the payout that will be received by your dependants when you die after taking the plan or when you die in the first year of taking plan, or when you die in the last of year. This kind of term is very useful especially for you who want to leave your dependants an extra financial support after you die. The funds (the mortgage that has been paid to dependants) probably can be used to cover the living costs, school fees/ tuitions, monthly bills, and others.

  • Decreasing term mortgage life insurance

Decreasing term mortgage life insurance is a policy in which the sum reduces in line with the debt of mortgage. This means, since you pay off the debt you owe, the amounts that the client will receive if she/ he dies also will decrease. For example: If in this year, your latest current mortgage is $150,000. This is the amount that will be paid out to your dependants if you die. If in tenth year, the mortgage is $1,000. This is a sum that will be received by your dependants if you die. However, your monthly premiums remain the same along the term of policy. Such kind of policy is usually selected by people who prefer repayment mortgage to regular mortgage. This is not appropriate for those who intend to take the interest of mortgage only.

  • Whole life of mortgage life insurance

This last kind of policy is the most beneficial one for the dependants, not for the client. Why? The policy allows your dependants to receive the payout whenever the client dies. About the premiums, they are more expensive and linked to some investments. That’s why it’s less popular than two other mortgage life insurance policies. When the investments grow slower than expected, the monthly premiums can be higher over time.

Another Extra in Mortgage Life Insurance

If you have made the decision which one mortgage life insurance policy that suits your needs, you probably want to intend to add other financial protections to your selected policy. Critical illness cover is the most popular name of additional insurance form which is included in life insurance. It works when the client suffers a serious illness then she/ he is potential to die before 65 years-old. This form addition will be paid out if you are positively diagnosed one of the listed serious illness, starting from heart attack to cancer. This can cover you during medical treatments. Remember, just particular serious illnesses are covered by such insurance addition. It will be better if you read the printed form carefully before making a decision, so that you understand more exactly about those which are and aren’t covered for.

For your information, if you take a mix life insurance-serious illness policy, you will receive one payout only at the event when the illness attacks or death comes first. This means, when a serious illness attacks you first, life insurance company will pay out you to cover your medical treatment. The company will not pay out anymore on your death. Another extra provided by life insurance companies is wavier of premium. It is added in the beginning of your policy (for all three kinds of policies). This extra is useful when you aren’t able to pay out your monthly premiums due to injury or illness. The company will do paying your premiums to provide the coverings. You, however, usually will be asked to maintain the premiums for few weeks in the first period you aren’t able to work.