Starting next week, submitting Obituaries, In Memoriams or Cards of Thanks for our publications and online becomes easier! Simply visitSTORY CONTINUES BELOW THESE SALTWIRE VIDEOSMy husband died in January, and we paid into mortgage protection insurance from 2004. The issue is that we had been paying mortgage insurance for 19 years with our regular payments and when my husband died we began a claim for the mortgage insurance and provided all the information to the bank.
Mortgage insurance is upsold by financial institutions to pay off your mortgage balance in the event of a death and the beneficiary is the bank, not the mortgagor. These funds are used to pay out and discharge the mortgage balance at the time of death, regardless of the amount that you started with. This is very different from mortgage insurance since the original amount of the policy stays the same. The money paid out from a term insurance policy can be used any way you wish – to pay off debt or a mortgage, to invest, or to replace lost income.Most people opt for mortgage insurance when they first get a mortgage since it is very easy to acquire. There is no medical exam required and you usually only have a few questions to answer truthfully at the time of application.
When your mortgage is paid off or if you move to another lender, or sell your home, your coverage ceases.Term life insurance, on the other hand, is much more detailed and they may require medical tests and questions to underwrite the policy at the time of application to ensure the policy will be paid out if a claim is made. The costs for this type of insurance varies based on your health, age, the coverage amount, and the term.