Mortgage protection insurance, a good investment?

A recent article circulated by Bankrate.com discusses mortgage protection insurance, sometimes called mortgage life insurance.

Dear Insurance Adviser, What is mortgage protection insurance, or mortgage life insurance? Should I purchase it? I don't want to leave my two children with the burden of paying the mortgage.
-- Esther

Dear Esther, Mortgage life insurance is a policy sold by your mortgage company/bank that pays off your mortgage upon your death. The beneficiary of this type of policy is almost always the mortgage company. Under some circumstances, that may be your preference. But in many cases, it may work out better for your loved ones to receive the proceeds themselves, giving them the choice of whether to pay off the mortgage. There may be more pressing needs than paying off the house.

Essentially, the value of a mortgage insurance policy declines with the principal balance of the mortgage.  $10,000 balance at death, that's what the policy pays.
Compare to conventional policies-

Term life insurance sold in the open market is often more competitively priced and allows you to name your children as the beneficiaries rather than the mortgage company.

Bottom line?  Read the full article to find out.

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if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

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