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Buying Life Insurance On Your Home Finance

By Mathew Merola

The majority finance houses would be required that home owners have mortgage protection life insurance. With this will ensure that the mortgage on the house is cleared in the event of the homeowners death. The insured amount would lower as the loan amount reduced from the monthly repayments.

Nowadays a level term policy seems to be more favored. This is where the insurance amount is the same, as the loan amount and it stay constant throughout the term of the policy and equal to the initial loan amount. There is an option where the premiums can be returned after the mortgage has been paid up. There is no tax payable on the money that the policyholder gets back.

Level benefit policies can be purchased for a period such as twenty, twenty-five or thirty years. The value will not decrease and the premium is guaranteed for the duration. The banks and some agents still market traditional mortgage protection, but it may be more beneficial for the client to get a policy with rates that are guaranteed to be lower, will pay on death or one which the amount does not decrease.

There are different sources that can offer different types of policies so buying it is quite easy. When you apply for a mortgage, you will be given the option to opt in for cover. This will then be automatically included in the mortgage with the mortgage provider.

If you are unsure about it, your bond originator might be able to refer you to an insurance agent who will explain the different options to you. They will also be able to help you assess your circumstances and help you select the best policy for your needs. Generally you may be able to find a policy that is cheaper than that offered by the lender.

Premiums may be paid monthly, bi-annually or once a year. Paying once a year will save you a fortune in monthly administration fees. On some policies, the premium rises as you age. If you are older than fifty-five, you should request a fixed rate policy. This will keep the premium the same for a number of years.

You should also ask the agent if the amount of cover would stay the same. Another important thing to ascertain is whether you may cancel the policy at any time. It is important that you select the type of life insurance policy on your home loan.

Wondering just How Much Life Insurance Do You Need. Get inside information now in our comprehensive affordable life insurance coverage guide.

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Article Citation
MLA Style Citation:
Merola, Mathew "Buying Life Insurance On Your Home Finance." Buying Life Insurance On Your Home Finance. 26 Aug. 2010. uberarticles.com. 4 May 2016 <http://uberarticles.com/finance/buying-life-insurance-on-your-home-finance/>.

APA Style Citation:
Merola, M (2010, August 26). Buying Life Insurance On Your Home Finance. Retrieved May 4, 2016, from http://uberarticles.com/finance/buying-life-insurance-on-your-home-finance/

Chicago Style Citation:
Merola, Mathew "Buying Life Insurance On Your Home Finance" uberarticles.com. http://uberarticles.com/finance/buying-life-insurance-on-your-home-finance/


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