Mortgage protection for the mortgage company, then why not protection for you and your family?

[B. Jason Perry]

When I purchased my first property I was told that if i did not put a certain amount of money down that I would have to purchase mortgage protection insurance, and that it would cost me a certain amount more each month of which would be tacked onto the loan payment. This is to protect the mortgage company.

Anyone who purchases a home with a loan should have life insurance to protect themselves. There is also mortgage protection insurance to protect the home buyer. If something where to happen to them it would pay off their mortgage up to the limits of the policy. This is nothing more than term life insurance in which the death benefit decreases each year with the mortgage.

These policies are still sold, however a term life policy is generally a better option, as the death benefit does not decrease with the mortgage. With many of the better life insurance companies, the insured can convert the term life insurance policy into a permanent insurance policy later down the road without having to qualify medically again. This means that althought they may not be insurable anymore, they can still have the opportunity convert the term policy into a permanent policy.