I Want to Leave Money to Pay Off My Mortgage If I Die Unexpectedly
Term life may be the simplest of all life insurance products. It's designed for low cost and coverage for a specific period of time and can provide money for your family's financial needs when you're gone.
Term life insurance could help with very important expenses − your mortgage and upkeep of your family's home.
Policy amount could cover mortgage
Here's how it could work: You purchase a term life insurance policy for at least the amount of your mortgage. Then, if you die during the "term" when the policy is in force, your loved ones receive the face value of the policy. They can use the proceeds to pay off the mortgage.
Actually, the proceeds from the policy − which are often tax free − can be used for any purpose your survivors choose. For example, they want to pay off high interest credit card debt, while continuing to carry a lower-interest mortgage.
So why use term insurance instead of mortgage life insurance to provide a means of paying off your mortgage?
With either type of insurance, you pay regular premiums to keep mortgage life coverage in force. But, with mortgage life insurance, your mortgage lender is the beneficiary of the policy rather than beneficiaries you designate. If you die, your lender is paid the balance of your mortgage. Your survivors or loved ones see none of the proceeds.
In addition, standard term insurance offers a level benefit and level premium for the term of the policy. With mortgage life insurance, the premiums may remain the same, but the value of the policy decreases over time as the balance of your mortgage declines.
Take the next step
Your home may be your family's largest asset − and their largest financial responsibility. Term life insurance can help them remain in your home after you're gone.
For help with your life insurance needs and to ask about discounts you may receive when you combine your auto and home policies, call us at 1-866-207-9160 or find an agent in your neighborhood.