Does Mortgage Protection Life Insurance Fit Your Needs?

I recently got a letter from my mortgage company stating that I qualify for their best offer ever for mortgage protection life insurance and for only $28 / mo I could get my mortgage paid off in full if I happened to pass away. I'm relatively young and this is my first house. I'm married and worry about things like would my wife have a place to live in the event that I died unexpectedly. Mortgage protection life insurance on the surface looks like a great deal but there is more to consider than is included in the sales letter.

What type of insurance is best for me to solve my problem? How much does it cost? What does it cover and for how much?

Mortgage protection life insurance was quoted at $28 / mo to pay off my relatively cheap $80,000 mortgage. This balance decreases by about $100 each month and creates a problem with this type of insurance. You are paying a flat rate to insure a decreasing benefit.

Can you get the same or better benefits cheaper?

There are many different types of life insurance. Call whoever you have doing your home owners insurance, car insurance, or other insurance products and they will likely have so many options for you it will frustrate you. They will likely steer you towards a whole life product because of the increased premiums required to fund them which pay them better. You may also want to check with your employer. The HR office where I work has negotiated great group rates for term life insurance.

Term life insurance will cover you for a fixed cost for a limited amount of time. I checked what was available at my work and wanted to get at least $80,000 for less than $28 / mo. For $18 / mo I was able to get $150,000 in coverage on me and $75,000 on my wife. This would provide enough to pay off my mortgage which was my original goal. It would also pay off all of our other debt. I'm fairly confident that my wife would be able to provide for herself without a mortgage, car payment, student loan payment, or any credit cards. The benefits don't decrease and I can take the policy with me if I leave my job. After gathering this information about my options I declined the offer from my mortgage company for mortgage protection life insurance and if you look into it I would think you might find this to be true for you too.