Mortgage life insurance has become a popular product mainly because it is marketed by mortgage companies, banks and some life insurance agents specializing in that field.
In its purest form, it’s just a life insurance policy where the insurance benefit follows the decreasing amount of debt on one’s mortgage. So, as your mortgage balance goes down, the amount of insurance you have goes down. These have a level premium but decreasing insurance year by year.
These days, these are less popular than level term life insurance for several reasons:You can buy level premium life insurance for 20 or 30 years, with guaranteed premiums without decreases in the life insurance benefit, usually at lower prices than mortgage life insurance. So, why get a policy that decreases in benefit?
By looking into life insurance , you’re taking an important financial step for those you love. The most important thing is to move forward and get the amount you should have so those people are taken care of, usually at least 10 times or up to 20 times your annual income.