Life is totally unexpected and uncertain, anything at anytime may happen to you or your family. That is why mortgage protection and life insurance is all about the certainty of planning for the uncertain. Both forms of insurance are created for the protection of your family and/or dependents and both provide peace of mind for you, knowing that their lifestyle can continue without additional difficulties or problems. While the coverage of the policies is similar, there are some differences in the design of these life Insurance programs as well as how they should be used.
Mortgage Protection insurance:-
Mortgage Protection is a particular type of life insurance, offered to consumers who have recently purchased or refinanced a home mortgage, generally within the last 12-18 months. Several critical situations in the life create the necessity for this type of product and since a home is one of the largest investments most families will ever make, carriers have created forms of life insurance designed to cover those needs most relevant to home ownership. This mortgage protection is much different and is for the benefit of you and your family.
Benefits for Policy:-
MP is a simplified issued life insurance policy in which insurer offers an expedited underwriting process that does not require a medical exam. In case of death, benefits are payable up to 125% of the mortgage balance or a maximum of $250,000. Typically, all that is required is a few medical history questions and, in some instances, a blood and vitals check in your own home by a registered nurse. It is an easy and affordable solution for all those who have minor health issues that are managed by oral or simple medication. Even informal tobacco users can benefit from such an option since under most situations they could be charged more for fully underwritten products.
Interestingly, these policies can offer many additional rider options, some of which are specific to the mortgage. One such option is a Mortgage Payment Rider which will pay all or part of your mortgage payment for up to 24 months after a 90 day waiting period when due to an illness or injury you become unable to pay. The most popular rider is the Return of Premium Rider which is a living benefit that repays you the entire total of premium you have paid over the term of the policy. Considering that most term policies run 15, 20, or 30 years like the mortgage, a return of $30,000 is not uncommon and is also an effective tool for paying off or down on the mortgage principal balance or to purchase an insurance product by paying in full.
Straight Term Life Insurance:-
It is the less expensive type of coverage and provides protection for those value minded consumers for the periods of 10-30 years. It can provide the coverage with a guaranteed premium for the length of the term. While these polices can be more affordable for very healthy consumers, more in depth medical underwriting will be required for polices over $250,000. Also, an individual will fall into specific premium risk classes based on age and health status, which may be beneficial for older healthy individuals and those who need higher amounts of coverage.
As you can see there is a wide range of options available to you while you decide to get a protection source for you and your family. These days you can run immediate online quotes directly from the internet. However, what type of policy is right for you depend on many factors, and your insurance advisor can assist you in determining which policies are most advantageous for your state of affairs.