Are you a new homeowner thinking about purchasing mortgage life insurance? Here’s everything you need to know about MLI and its alternatives.
Owning a family home can be an exciting milestone in your life, and while this is often a dream come true for most people, having a mortgage comes with its own responsibilities and concerns, particularly: who will pay off the loan if something were to happen to you?
Purchasing mortgage life insurance is not compulsory, however it is advisable if you are a homeowner because it will:
- Ensure your family is kept financially stable
- Pay off your mortgage in full so that your family will always have a roof over their heads
- Provide you with total peace of mind, knowing your loved ones will be taken care of
- Allow your spouse and/or children to spend your funds in a way that is beneficial to them
Affordable and Customizable Mortgage Life Insurance
At AIME, we understand the limitations of traditional bank-issued mortgage life insurance. Our 20/20 MLI has been designed with YOU in mind and always works in your favor. Our licensed agents can help guide you through the process of purchasing mortgage life insurance, and ensure that you find a policy that’s right for you.
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The Alternatives to Mortgage Life Insurance
If you are a new homeowner, you may be considering mortgage life insurance, or wondering what your alternatives are. It’s important to fully understand all your choices so that you can make the best choice when it comes to the financial stability of you and your family.
Whole Life vs Term Life vs Mortgage Life Insurance
Term life and whole life insurance are alternatives to mortgage insurance. While most mortgage life insurance policies are very similar to term life policies (i.e. allow you to use the benefit to pay the mortgage, education costs, or anything else), you can purchase larger amounts of life insurance.
Main difference: The main difference between term life/whole life insurance and mortgage life insurance is that with mortgage insurance protection, your death benefit will likely be capped at your initial mortgage amount.
What’s the advantage of purchasing mortgage life insurance? MLI tends to be cheaper than life insurance. In addition, you are often not required to undergo a medical exam to qualify for an MLI policy.
Pros and cons of MLI vs Term Life vs Whole Life Insurance
Mortgage Life Insurance Pros
- It guarantees that your mortgage will be paid in full.
- It will help pay for your income in case you become disabled or critically ill and are unable to work.
- It’s cheaper than life insurance.
- It’s easier to qualify than for life insurance.
Mortgage Life Insurance Cons
- There’s a declining payoff.
- With traditional MLI, the payout goes to the bank and not your beneficiary. (How 20/20 MLI is different)
Term Life Insurance Pros
- Better death benefit
- Lower insurance rates
Term Life Insurance Cons
- A medical exam will be required to determine if you qualify
- It only covers you for a predetermined period
Whole Life Insurance Pros
- Better death benefit than MLI or Term Life Insurance
- Cash value
Whole Life Insurance Cons
- It’s more expensive
- An extensive medical exam is usually required
Always Remember to Shop Around
No matter what type of insurance you decide is right for you, always make sure you shop around to find the right plan for you. Mortgage life insurance can be a good choice if paying off your mortgage is your top priority, or you would like a policy that pays your mortgage in case you become critically ill or disabled.
Call Today
To find out more about our customizable and flexible mortgage life insurance policies, contact one of our licensed agents today at 1-844-974-2020 or fill in our online contact form.
