My mortgage company says I should buy life insurance from them, what is that about?
Most likely your mortgage company is offering something called “mortgage protection life insurance” or “decreasing mortgage protection”. This type of protection is a basic term life insurance policy that pays off your mortgage loan at your death. While the premium is generally level, the death benefit decreases over time (as your mortgage decreases with payments) There may be better alternatives, so you should talk to your insurance professional before purchasing any type of coverage to see what is most appropriate for you.
Most likely your mortgage company is offering something called “mortgage protection life insurance” or “decreasing mortgage protection” or a similar title. This sort of protection is a basic term life insurance policy that usually has a level premium, but the death benefit pays off your mortgage loan at your death. This level premium may or may not reflect the decreasing death benefit. What that means is that you will be paying the same premium each year for a death benefit that is decreasing over time (as your mortgage decreases with payments). This is the case with any sort of “credit life insurance”, insurance taken out in conjunction with an installment loan. There may be better alternatives. You should talk to your insurance professional before purchasing any type of coverage to see what other alternatives are available.
