January2018

Mortgage Life Insurance and Mortgage Protection and You

Decreasing term mortgage life insurance pays your loved ones a lump sum if you die during the set term of the cover. The amount they are paid is contingent upon the term of the life insurance, which decreases just about in line with the amount that remains on your mortgage. By the end of the life insurance plan, the lump sum will be down to zero.

Decreasing term life insurance covers you for a set term. It will pay your dependents a lump sum if you die during that term. How much your dependents are paid will depend on the term of the insurance policy, which decreases roughly in line with the amount outstanding on your mortgage. The lump sum decreases during the period of the term by the end of the plan, it is down to zero.

How much your life insurance premium is depends on the sum to be insured, the period of cover, your age, your sex and whether you smoke or not. A non-smoker is usually defined as someone who has not smoked for at least twelve months. This kind of insurance is not great for investment purposes, as there is no maturity value payable at the end of the plan.

Although the mortgage life insurance cover reduces, your monthly premiums will stay the same throughout the policy. With some decreasing life insurance policies, you can have additional options, such as critical-illness cover. Adding critical-illness cover will mean the plan pays out if you get a qualifying critical illness or if you die during the term of the policy.

Decreasing Mortgage Life Insurance Pros and Cons

Decreasing life insurance is great if you are keen to leave a cash sum to your loved ones to help pay off your mortgage after you have died. Decreasing life insurance is also cheaper than term life insurance, which pays out the same sum regardless of when you die.

Weighing against decreasing mortgage life insurance is the fact that the policy pays out only if you die or are diagnosed with a qualifying critical illness (if you have critical-illness cover). The policy will also have no maturity value if you live beyond the plan.

Mortgage protection

Mortgage protection is an important part of your mortgage needs. Your mortgage is a big financial commitment, so protection is very important. It is always important to budget for mortgage protection as it is easy to ignore these payments when looking at your monthly mortgage costs.

When financial advisors talk about a fully protected mortgage, they mean protecting your mortgage against every eventuality. The areas of mortgage protection are death; redundancy; critical illness, and long -term sickness.

Mortgage protection pros and cons

Mortgage protection is not compulsory. Mortgage protection might seem a depressing thing to think about. However, you could become ill and be without your income at any time. This is why mortgage protection is so vital. It’s a financial safety net and, now more than ever, protecting your mortgage is vital.

Mortgage protection is good because it need not cost the earth, your premium is based on the level of cover you need, how old you are and the size of your mortgage repayments. It’s also a way of protecting your savings if you fall ill and can’t pay your mortgage, you’ll soon eat into your savings. However if you have no earned income and are on state benefits, mortgage protection insurance will not be right for you.

Copyright (c) 2009 Mark Walpole

Term Life Insurance 101

To begin with it is good to be clear on what life insurance actually is. When an individual dies, there are many financial burdens. Family expenses and mortgage payments are just a few. The primary function of a life insurance is to provide, upon death of the policyholder, an amount that is sufficient to pay for any or all of the expenses. The expenses that will be covered are predetermined in the insurance coverage. Term life insurance is a kind of insurance policy that is exclusively for death coverage. These policies are written out for a specified period of time. This is also called the term as in the name term life insurance. The most regular terms are one year, five years and ten years, although longer terms like twenty and thirty years are also available.

If the person who is insured dies during the period of the term of the policy, the death benefit is paid directly to the specified beneficiaries. However, if on the completion of the term the insurance holder is still alive, the protection ends.

Due to the fact that term insurance provides a benefit only if the insurance holder dies during the term of the policy, it?s premiums will be the nearest to the pure death cost. This is the reason why term life insurance is the coverage that is least expensive to buy at younger ages. However, at an older age, the price of a term policy will rise swiftly along with the rising death cost. This rising cost may soon become exorbitant for a number of senior citizens. The premium of a term insurance policy will stay put at the same amount during the course of the term. It then increases at every renewal.

Term insurance is the cheapest form of life insurance providing only risk coverage without any savings component. It is recommended if you have other savings and retirement plans in place.

A Guide To Low Cost Life Insurance

The objective of a Life Insurance Policy is to protect the family members from the financial loss incurred, due to the death of the insured person. Apart from the emotional trauma, they have to deal with the resultant financial loss. An insurance coverage can save them a lot of economical hassles.

There are two types of Life Insurance, namely Permanent and Term Insurance. Whole and Universal Life Insurance fall under the Permanent Insurance Plan. Permanent Insurance plans allow the investors to save and add extra benefits to the policies, by paying extra charges. They also allow extended term periods and the ability to borrow. These investments are mostly tax-free and cover the financial loss that arises due to the investor?s death. However, the premium rates of Permanent life insurances are usually high and include additional charges for adding beneficiary features. The premium rates and benefits are decided after analyzing the health conditions, income level and regular expenses incurred.

Term Insurance on the other hand, requires a lesser premium rate and is considered ideal for young and healthy people. A term insurance covers a beneficiary only if the insured dies during the insured period. A Term Insurance can become economical if the difference amount between the premium rates is invested, to earn an additional income.

It is crucial to do a little research and then decide the right kind of life insurance plan, according to individual needs. A wrong investment might lead to the loss of policy. It is advisable to compare the quotes offered by the various low cost insurance companies online. Investors can take the help of insurance brokers to have a better idea of the pros and cons of their policies. Life insurance policies ensure that the surviving family members benefit from the investment made by the insured.