What is Mortgage Protection and Do I Need It?

Mortgage protection is a type of Life Insuranceearner can be covered for all or some of the
that will pay off all or part of your Mortgage ifmortgage balance. Other options will pay your
you die. Some forms of Mortgage protection willmortgage and optionally other bills if you can't
also make your monthly mortgage payments ifwork do to illness or injury.
you become injured or critically ill.The most popular option actually will return all of
Many people feel I already have life insurance whythe money you paid in when you are alive and
do I need Mortgage protection as well? Manywell at the end of the coverage term. This means
people have life insurance through their jobs. Theif you die your family and loved ones get the full
problem here of course is if you loose your Jobsamount of the death benefit but if you live you
you loose your Life Insurance. Still others haven'tget all your money back. The way I like to look
looked at their Insurance needs for over 10 yearsat this is lets say you pay $50 a month and you
or more. The Majority of these are underinsured.have a $200,000 death benefit if you die your
Many people purchased insurance before theyfamily gets $200,000 but if you live 30 years
were homeowners or when they had Mortgagesfrom now you will receive every penny you paid
that were much smaller then they are now.in ($18,000). They pay you if you live and they
There are many kinds of life Insurance and therepay you if you die.
are many kinds of Mortgage protection insurance.Think of it this way you can put $50 a month in a
Most Mortgage protection insurance falls into 2bank or mutual fund and if you die 10 years from
different categories, the old kind and the newnow your family gets $6,000 plus interest and/or
kind.dividends and/or capital gains or losses. But with
The old kind of Mortgage protection insurance ismortgage protection insurance your family and
tied directly to your current mortgage. Thisloved ones get the full death benefit of $200,000.
means if you sell your house refinance yourOf Course if you live you get your $18,000 back.
house you are no longer insured thus you mustWhat would you rather have a little bit of interest
now get new insurance at a higher cost becauseor capital gains of the peace of mind that comes
your age has changed (your older) and possiblyfrom knowing your families and loved ones are
your health has changed. With the old kind asprotected?
your Mortgage declines so does your coverage.(This is just an example your death benefit is
The new kind is independent of your mortgage.based on your age and may differ from the
Thus if you sell or refinance your house you stillabove)
keep the new kind of coverage. The DeathThe best way to find out if you need additional
benefit stays the same no matter what happenscoverage is schedule a no obligation appointment
to your Mortgage. You have many options whenwith a licensed Life Insurance professional in your
it comes to the options with the new kind. In thearea.
case of 2 income earning families each income