When purchasing a home, most people understand the importance of buying home insurance to protect their property and the belongings inside. However, many homeowners do not realize that it’s just as beneficial to buy mortgage life insurance, which pays off your mortgage in the event of your untimely death. The guide below explains how this type of insurance works and why it’s important. 

How It Works

Also referred to as mortgage protection insurance, this safeguards your family from being burdened with costly home payments should you die unexpectedly. As with regular life insurance, the process involves purchasing a policy, paying monthly premiums, and having a death benefit paid out to your beneficiaries if you pass away during the policy’s term.

Unlike life insurance, however, the beneficiary for most mortgage life insurance policies is the mortgage lender. Rather than being paid out to family members, the death benefit goes directly to your lending company to pay off your mortgage. This type of insurance also decreases over time to match the balance of your mortgage.

Why It’s Beneficial

It’s beneficial to have one in addition to a regular life insurance policy—when your mortgage is paid off, your family can use your life insurance benefits to cover other crucial living expenses.

Lastly, this type of insurance frees your family from having to manage funds in any way. The death benefit is specifically allocated to pay off your mortgage, and it bypasses family members by going straight to your mortgage company.

If you need mortgage life insurance, contact Kramer-Myers & Werring-Dickerson Insurance in Batavia, OH. Since 1960, this highly reputable company has been providing residents and businesses with a wide array of insurance options, from home, auto, and life insurance to fire protection and farm insurance. Call (513) 732-1461 or send a message through the company’s website to get in touch today.