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Monday, Nov. 21, 2005

What is mortgage life insurance?

Anyone who has searched for any type of insurance policy will know that there are a great many on offer. You are advised to get life insurance, health insurance, home insurance, contents insurance, critical illness insurance and terminal illness insurance but the list doesn’t stop there. It is true that you should do as much as you can to prepare for any eventuality but it often isn’t a financial option to be able to pay for all of these policies on a monthly basis or does it? You can combine critical illness and terminal illness cover with your life insurance if you like, but although this may be cheaper it doesn’t give you as much cover as taking your illness covers and your life insurance separately. The fact is that not everyone can afford to fully insure themselves for all of these factors and something has to give somewhere along the line.

Mortgage life insurance covers your mortgage in the event that you should die. It doesn’t pay out for any other reason and the premiums you pay will decrease in line with your mortgage. It is one of the more affordable insurance policies available but it does have both it’s positives and it’s negatives that you should consider before applying for a policy.

Disadvantages of mortgage life insurance.

Because there are so many different forms of insurance it is almost inevitable that if you take out every single one you will overlap your coverage somewhere along the line. If you already have life insurance, for instance, you need to consider whether it is really necessary to take out life mortgage insurance. You can simply up the settlement figure on your life insurance, often costing

you less than maintaining and paying for two separate policies. Also, mortgage life insurance does not cover you for critical illness or terminal illness and you should consider buying these separately if required. The bottom line is that you need to check the policies you have to see what eventualities you are covered for. If you are covered for certain things more than once then you may want to reconsider on the mortgage life insurance front.

Advantages of mortgage life insurance.

The big advantage of the mortgage life insurance policy is that you do not need to take a medical examination. If you already know you have bad health or you are getting older then this could mean that the mortgage life insurance is the perfect answer for your insurance woes. A medical exam is not required simply because insurance companies pay out a lot less frequently on mortgage life insurance than they do on full or term life insurance.

Do I really need all this insurance?

Check the policies you have or the policies you are considering getting and make sure that you aren’t paying twice for the same cover. Where possible ask for quotes for joint policies and compare these quotes to the amount you are paying for separate policies. Many people take out mortgage life insurance when they are already covered and this means extra coverage and extra costs. Mortgage life insurance does not require you to take a medical examination and often costs less than full life insurance. Insurance Web have more details on mortgage life insurance and points to consider before jumping in and insuring yourself. This article has much more detail on the same topic too, and you may want to consider reading it if you are still unsure.