Term Life
Term life is the most affordable type of insurance when initially purchased. It is designed to meet temporary needs. It protects for a specific period and generally pays a benefit only if you die during the term, as long as your premiums are paid. This type of insurance often makes sense when you need a coverage that will disappear at a specific point in time like a Mortgage Term.
Term Life could either be converted into a permanent life within the first 15 years of the coverage or renewed once the period has expired, but premiums will likely increase. Premiums could be fixed if guaranteed and paid for the length of the term, which could be leveled to 10, 20, Or 30 years or annually renewable (ART) for a higher premium since the policyholder is a year older.
Term life accumulates no cash value, but some insurers offer other living benefits as riders to it. Typically, term life allows a higher death benefit for your premium dollars.
Mortgage Protection
Mortgage protection is a type of life insurance designed to protect you as a homeowner by paying off your mortgage if you become completely disabled or, worst case scenario, you die. The coverage is similar to a term life coverage in the sense that it guaranties to pay within the term off your mortgage. Main differences are:
- Your mortgage lender is the sole beneficiary of the policy rather your designated beneficiaries.
- Because it’s used to pay off your mortgage balance, it usually decreases the death benefit amount as your mortgage ages to match your remaining balance.
- Mortgage Protection only provides coverage for the balance of the initial mortgage amount along with interest, it won’t cover refinancing. Request A Quote