Mortgage protection insurance refers to a type of decreasing term life insurance policy where you pay a non-changing premium for the duration of your mortgage. If you die while the policy is in effect, the insurance pays off your mortgage. The lender can become the beneficiary of the policy if the borrower paying for the policy defaults on the loan.
Mortgage protection insurance cost factors
If the outstanding balance of your mortgage is high, your monthly premium will be high as well, and your premium will remain the same even as the balance decreases. This is because you are more likely to die as time goes on, increasing the likelihood that your life insurance company will have to pay on your policy.
Mortgage protection insurance can be purchased either at the same time you buy a home, or at any time in the future. As with other types of life insurance, your age, smoking status and value of your death benefit (the amount left on your mortgage) are taken into account when a life insurance company reviews your application and sets a price.
Mortgage insurance options
Mortgage protection insurance policies will only pay the balance of your mortgage at the time of your death (or maybe a little more if you paid ahead on your mortgage). If you decide this is appropriate for your situation, remember that a regular decreasing term life policy—one not marketed as a "mortgage protection" policy—can be used for the same purpose, and may also cost less. However, if you want to give your beneficiaries a choice of how to use the insurance money, consider level term life insurance instead.
Depending on your insurance company, joint mortgage protection insurance may be available that covers both you and your spouse and pays out when either of you die.
If you refinance, see if a new policy will get you a better premium. If you default on your mortgage, check with your life insurance company and see if they will extend your coverage.
Mortgage protection insurance and private mortgage insurance
Though they have similar names, these two types of insurance are not related. Private mortgage insurance (PMI) is typically required by the lender when you purchase a house and make a down payment of less than 20%. "Lenders take a risk when a buyer puts down less than 20%," says Sam Belden, Vice President at Insurance.com. "Private Mortgage Insurance is a way for lenders to protect themselves if a buyer didn't put much down and ends up in foreclosure." In today's difficult economic environment, few lenders will even grant a loan with less than 20% down, so PMI may not be offered in the future.
Although PMI makes it easier for you to get a loan and can help you get a house without waiting to build up savings, it pays the lender, not you. It does not reduce the amount of money you owe the lender. It is not a substitute for life insurance or mortgage protection insurance, which will pay off all or most of your mortgage in the event of your death.
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Originally posted September 20, 2004.
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Filed under insurance by on Dec 22nd, 2010. Comment. 
Why and how are employers even allowed to not help pay for employees' health insurance so that ...?
... the government ends up paying people's health insurance anyway?
I just learned that my state provides some health insurance for people making less than 200% of the poverty line for something like $30 a month. 200 percent of the poverty line for a single person is about $20,000 a year. Given the massive numbers of people working crap no-benefit part-time jobs and people working full-time through temp agencies, states must simply be providing insurance to A LOT of people. How are conservatives whining about government-sponsored health care ignoring the huge amounts of people who work both full and part-time and already require and receive government help because businesses find it convenient and profitable to pawn it off on the government?
Um, the companies refusing to provide health care are CONGLOMERATE CORPORATIONS, Wal-Mart and other huge international temp agencies. Jeez. Get a clue.
Beacuse, YOU the American electorate have not acted to pressure your elected representatives to change things.
First of all, Obama is not going to bring in universal healthcare. He wants to make insurance more available to all.
Second, of course universal health-cover sucks. That is why we in Western Europe have it. We think, hmm, our healthcare system sucks. I know, lets keep it. I guess that is the same with Japan and Canada as well.
FACT - the USA spends more on healthcare PER PERSON than any other nation on the planet.
FACT - the US has higher death rates for kids aged under five than western European countries with universal health coverage.
That means that a dead American four year old would have had a better chance of life if they were born in Canada, France, Cuba, Germany, Japan etc, all of which have universal health coverage.
Filed under Health Insurance by on Sep 14th, 2010. Comment.
What is open enrollment? In terms of health care insurance??
It's a specified period of time when anyone who is a member of a group, such as an employee of a company, can enroll himself or family members into his company's group insurance plan without having to supply evidence of insurability (medical records, etc.) if he wasn't already enrolled in the insurance program. This term usually applies to group health insurance programs. If you're considering getting involved in your employer's group health plan, open enrollment is the best time to do it.
Filed under Health Insurance by on Aug 24th, 2010. Comment.