Mortgage Life Insurance Rate

Types Of Mortgage Iife Insurance Plans

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Your mortgage life insurance rate can differ considerably depending on the type of policy you buy.

• Decreasing Term Life Insurance

  The most popular mortgage life coverage is decreasing term life. These policies were specifically designed to pay off your mortgage balance upon your death. As the mortgage balance decreases the face amount of your policy decreases. The premium remains level throughout. These rates are very inexpensive.

• Level Term Life Insurance

  It makes some sense to use level term to pay off your mortgage balance. You have a $100,000 mortgage to start but like any mortgage the balance decreases over time. At any point of death the full face amount is paid, $100,000.

  Your beneficiary pays off the mortgage and there is some cash left over depending on when you die. The premium rates for the level term policies are a little higher than those of the decreasing term policies.

• Cash Value Life Insurance Policies

  You could also use cash value life insurance policies to pay off your mortgage on your death. These policies can do even more. Let us suppose you get to 15 years. Your mortgage is for 20 years. You can use the cash value you built up in your policy plus your dividend to pay down your mortgage.

  In some cases the the cash is sufficient at that point to pay off the balance completely. Keep in mind that dividends are not guaranteed. The mortgage life insurance rate for permanent life insurance policies is much more than is required for a similar amount of level term life insurance.

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