I’m going to break this down into two parts.
Mortgage protection is a term structured life insurance policy that is responsible for paying off the mortgage upon death or upon a lot of other health related things called living benefits.
Please check out our other blogs, or call us, to learn more about living benefits. They’re incredibly important. And ironically, I would say that they’re more important than the death benefit.
What is the death benefit? Most of you already know it is the benefit of the policy, meaning the payout. Let’s say you have a $200,000 mortgage. The policy is set for $200,000 coverage.
You die and that money goes to your primary beneficiary, tax-free.
So very, very simple. Now, if you are on the other side, let’s say you are under the age of forty-five or 50, potentially as high as fifty-five, depending upon the program, you should be able to get about a twenty-five or in most cases a 30-year program. So if anything happens during a 30 year, as long as you keep making your payments every month. Assuming that’s how you want it to be built, they can also do quarterly every six months, every year, things like that, but make your payments long as you don’t miss your payments and you’re on top of that and there are no extended laps, then the insurance carriers on the hook for the policy amount.
So a lot of these policies, the best ones are level. The coverage amount does not go down as the mortgage goes down. So let’s say you have a 30 year, two-hundred-thousand-dollar mortgage, two hundred thousand or policy. And let’s say you die in 20 years. It doesn’t matter what the cause of the death is. In 20 years, the mortgage will have been paid down here. The policy is still up here. The mortgage gets paid off.
All this that’s leftover after the mortgage is paid off, goes to your beneficiary. It’s real money. It doesn’t go directly to the lender.
So goes your beneficiary, goes in their bank account tax-free and it can be used for anything. So now they have a home that’s owned. They own their own, the home free and clear. There’s no more debt on it. And they have this leftover money as well that just went into their bank account. And that is life-changing assistance that you just gave them. So whether it’s family or whether it’s someone else, you know, reach out to us and we’ll see what you qualify for part of a process as we shop a whole bunch, these mortgage protection companies, to get you the best possible options.
And again, living benefits, please check out our other videos. Living benefits are so crucially important.
The death benefit is something you commonly see and all of these policies and usually they have really good death benefits, living benefits. That is what separates the best programs and best companies from those that just offer insurance. OK, so beyond that, please reach out to us if we can help with anything else and stay safe out there.