{"id":1150,"date":"2012-07-16T17:51:10","date_gmt":"2012-07-16T17:51:10","guid":{"rendered":"http:\/\/www.knowfinance.com\/?p=1150"},"modified":"2012-07-16T17:51:10","modified_gmt":"2012-07-16T17:51:10","slug":"mortgage-life-insurance","status":"publish","type":"post","link":"https:\/\/www2.stockmarketwatch.com\/learn\/mortgage-life-insurance\/","title":{"rendered":"Mortgage life insurance"},"content":{"rendered":"<p>Mortgage life insurance is purchased in order to guarantee that any outstand\u00ading mortgage debt you may have at the time of your death will be paid off in full.<\/p>\n<p><strong>Types of Mortgage Life Insurance<\/strong><\/p>\n<ul>\n<li>Creditor mortgage insurance offered by lending institutions when a mortgage loan is approved.<\/li>\n<li>Personal mortgage insurance plan<\/li>\n<\/ul>\n<p style=\"text-align: center;\"><strong>Creditor mortgage insurance benefits the lender<\/strong><\/p>\n<ul>\n<li>Lender is the sole beneficiary<\/li>\n<li>Death benefit decreases over time<\/li>\n<li>Premium stays the same<\/li>\n<li>With every payment, you get less value for your money<\/li>\n<li>If you switch lenders, you\u2019ll need new mortgage insurance, and may pay more because you\u2019re older or may not qualify<\/li>\n<li>Insurance can be cancelled by the lender without warning<\/li>\n<\/ul>\n<p style=\"text-align: center;\"><strong>Personal mortgage insurance plan \u00a0<\/strong><\/p>\n<ul>\n<li>You decide who the beneficiary will be<\/li>\n<li>Your beneficiary spends the tax-free death benefit<\/li>\n<li>Death benefit stays the same<\/li>\n<li>You can transfer your mortgage<\/li>\n<li>No need to reapply<\/li>\n<li>No risk of losing your insurance<\/li>\n<li>You are in control<\/li>\n<li>You can cancel or alter your coverage when you choose<\/li>\n<\/ul>\n<p>A personal life insurance policy doesn\u2019t insure your mortgage. It insures you. After all, you\u2019re the one making the mortgage payments. A personal life insurance policy provides protection that works for your needs, now and in the future, providing flexibility to change along with you.<\/p>\n<p style=\"text-align: center;\"><strong>Mortgage Protection vs Life Insurance<\/strong><\/p>\n<p>There are different types of mortgage protection and life insurance (or assurance) available. Some provide a payment only in the event of your death, whereas those with critical illness cover included will provide the lump sum if you are diagnosed with a qualifying medical condition.<\/p>\n<p style=\"text-align: center;\"><strong>Level term life insurance<\/strong><\/p>\n<p>Provides a fixed lump sum payment should you die within a specified period of time.<\/p>\n<p><strong>How it works:<\/strong><\/p>\n<ul>\n<li>You select the amount of cover you would like and the period that you want the cover to run for.<\/li>\n<li>If you die during the term of the policy, your insurer will pay the fixed amount you are covered for.<\/li>\n<li>If you set up a joint policy (a single policy to cover two people), the amount of cover is paid\u00a0 out upon the first person\u2019s death.<\/li>\n<li>The policy expires when a claim has been paid.<\/li>\n<li>The policy has no cash-in value at any time.<\/li>\n<\/ul>\n<p style=\"text-align: center;\"><strong>Level term life insurance with critical illness<\/strong><\/p>\n<p>Provides a fixed lump sum payment should you die or suffer a critical illness within a specified period of time.<\/p>\n<p><strong>How it works:<\/strong><\/p>\n<ul>\n<li>You select the amount of cover you would like and the period that you want the cover to run for.<\/li>\n<li>If you die or are diagnosed with a critical illness during the term of the policy, your insurer will pay the fixed amount you are covered for.<\/li>\n<li>The type of illnesses typically covered includes heart attack, stroke, cancer and multiple sclerosis, but the precise cover and exclusions may vary by insurer and the level of cover.<\/li>\n<li>The full list of specific qualifying illnesses is detailed by insurers in their key facts document, which is available upon request.<\/li>\n<li>If you set up a joint policy (a single policy to cover two people), the amount of cover is paid out upon the first claim.<\/li>\n<li>The policy expires when a claim has been paid.<\/li>\n<li>The policy has no cash-in value at any time.<\/li>\n<\/ul>\n<p style=\"text-align: center;\"><strong>Mortgage protection cover \/ decreasing term insurance<\/strong><\/p>\n<p>Provides a decreasing lump sum payment to cover your outstanding mortgage amount should you die within a specified period of time.<\/p>\n<p><strong>How it works:<\/strong><\/p>\n<ul>\n<li>You select the amount of cover you would like and the period that you want the cover to run for.<\/li>\n<li>The amount of cover reduces each month during the policy term and is calculated to equal the capital outstanding under a normal repayment mortgage.<\/li>\n<li>If you die during the term of the policy, your insurer will pay the calculated amount of cover at that time.<\/li>\n<li>If you set up a joint policy (a single policy to cover two people), the amount of cover is paid out upon the first person\u2019s death.<\/li>\n<li>The policy expires when a claim has been paid.<\/li>\n<li>The policy has no cash-in value at any time.<\/li>\n<\/ul>\n<p style=\"text-align: center;\"><strong>Mortgage protection cover \/ decreasing term insurance with critical illness<\/strong><\/p>\n<p>Provides a decreasing lump sum payment to cover your outstanding mortgage amount should you die or suffer a critical illness within a specified period of time.<\/p>\n<p><strong>How it works:<\/strong><\/p>\n<ul>\n<li>You select the amount of cover you would like and the period that you want the cover to run for.<\/li>\n<li>The amount of cover reduces each month during the policy term and is calculated to equal the capital outstanding under a normal repayment mortgage.<\/li>\n<li>If you die or are diagnosed with a critical illness during the term of the policy, your insurer will pay the calculated amount of cover at that time.<\/li>\n<li>The type of illnesses typically covered includes heart attack, stroke, cancer and multiple sclerosis, but the precise cover and exclusions may vary by insurer and the level of cover.<\/li>\n<li>The full list of specific qualifying illnesses is detailed by insurers in their key facts document, which is available upon request.<\/li>\n<li>If you set up a joint policy (a single policy to cover two people), the amount of cover is paid out on the first claim.<\/li>\n<li>The policy expires when a claim has been paid.<\/li>\n<li>The policy has no cash-in value at any time.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Mortgage life insurance is purchased in order to guarantee that any outstand\u00ading mortgage debt you may have at the time 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