This is so many new Homeowners today. We purchase a home then realize there are a few things that I missed.
A key way to use Term Life Insurance as Mortage protection.
If the insured individual dies during a set term, term life insurance assures payment of a stipulated death benefit to the insured's beneficiaries.
These plans have no value other than the guaranteed death payment and do not include any savings features like full life insurance.
Premiums for term life insurance are determined by a person's age, health, and life expectancy.
It may be possible to convert term life insurance to whole life insurance, depending on the insurance company.
Term life insurance contracts that last 10, 20, or 30 years are commonly available.
Understanding Term Life Insurance
Term life insurance, sometimes known as pure life insurance, is a form of life insurance that ensures the payment of a given death benefit if the insured person dies within a certain time period. When the term life insurance policy's term expires, the policyholder has the option of renewing it for another term, converting the policy to permanent coverage, or allowing the policy to lapse.
What is Term Life Insurance and How Does It Work?
The premiums for term life insurance are calculated by the insurance company based on the policy's value (the payment amount) as well as your age, gender, and health. A medical examination may be necessary in specific instances. Your driving record, current medicines, smoking status, career, hobbies, and family history may all be questioned by the insurance provider.
If you die within the policy's term, the insurer will pay your beneficiaries the face value of the policy. Beneficiaries may utilize this cash benefit, which is usually not taxed, to pay for medical and funeral expenses, consumer debt, or mortgage debt, among other things. There is no reimbursement if the insurance expires before your death. You may be able to renew term insurance after it expires, but your rates will be adjusted based on your age.
How to use it as Mortage Protection?
The part you have been waiting for. How to really use your Term Life Insurance as Mortage Protection. To understand this better you must understand the concept. Most people have a home that they live in and are not aware of the primary person that makes the most income unfortunately passes. When this happens most families still have a mortgage to pay and are not sure how to pay the rest of it off plus burial and trying to comprehend the death of a loved one. This is where the mortgage protection concept comes in to create that piece of mind. By having a policy to be in force just to cover the remainder of the mortgage. When the mortgage is paid off this policy will expire however long the time. Now next week we can talk about converting your mortgage protection policy to a whole life policy with cash value.
Thank you for reading. You can always view our website to receive more information.
Click below to find out more.