Insurance: Mortgage or addtional life?

Question

Is it better to purchase enough additional life insurance to cover the remaining balance on the mortgage or purchase mortgage insurance? Which is more economical after age 45?

Any suggestions on reasonably priced mortgage ins. companies?

Answer 1

This Accidental Death Mortgage Insurance is often called "Optional Insurance" by mortgage industry professionals.

In the mortgage industry, Optional Insurance is thought to be a rip-off. If you have any sort of Life Insurance, then your beneficiaries will receive a ton of money if you die. If they choose to pay off the mortgage with that extra cash, nothing is stopping them. If they wish to buy a new house or open a new business (and leave the mortgage balance as it is), then they would have those options as well.

I recommend against Mortgage Life Insurance (Optional Insurance). You can get a better deal on a regular Life Insurance policy that will accomplish the same objectives and offer your beneficiaries more flexibility.

Hope that helps.

Good luck!

Answer 2

Here's the deal, its all basically the same, its all life insurance, if you only are worried about paying off your mortgage in the event of your death then you would basically get a term life insurance policy for the term as long the loan of your mortgage, by the end of that term if your still living your mortgage will or should be paid off and that insurance is just gone. If you purchase a whole life policy which will never end until you die, your beneficiary could still use the money to pay off the mortgage debt if they had to and if not then they would just get to keep that money to pay off other debts, funeral, college or whatever they wanted. So really it just depends on whether or not your wanting to leave loved ones some money or are just concerned with your mortgage.

Answer 3

I agree that you would need to price both, but the mortgage life policies would provide joint coverage and the coverage declines as the balance of the loan declines so you are paying for less insurance as you age so it may be more economical.

On the other hand, you could get a couple of level term policies which would not be tied to paying off the mortgage and could be used for other purposes so you or your spouse would have more flexibility.

Consult with a reputable life agent and they ought to be able to guide you in the right direction according to your personal circumstances.

Answer 4

Your best bet would probably be to contact a local life insurance agent and discuss it with him/her.  

I believe that the life insurance is a better route due to the fact that it can be used to cover your mortgage and any other outstanding debt needed to pay off.  If you just have the mortgage insurance, then yes the larger of your bills is going to be paid, but what about funeral costs and credit card bills.  There is much to consider other than your mortgage.  Hope this helps.

Answer 5

Oh, it's better to purchase additional term life insurance, regular insurance, to cover the remaining term and balance of the mortgage.

Mortgage insurance is DECREASING term, and is more expensive than flat term.   AND, the payee is the creditor.   You're better off letting the payee be a family member.

Answer 6

You'll need to price both and consider your overall financial and family situation.  My inclination is that "regular" life insurance is better than "mortgage insurance."

Answer 7

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