Mortgage Life Insurance- How Does It Work?

[ThelmaBurnett]

My DH is very bad in handing the money. He has more than 4 mortgage loans from 5 Year Mortgage Rate (Calgary) alone. He doesn't involve me in his money matters saying he can deal with it. I seriously fear that we are sinking into bankruptcy. But he is always optimistic that we can get out of it. Since I have not much knowledge about the financial matters, I didn't interfere with it too much. But now I feel I am losing hold of things.

Now coming to my question, I recently read about an insurance policy called Mortgage life insurance. I have heard that such an insurance can benefit people like us. How does this work? But in such a critical can we get such an insurance? Is it really benifical? Thanks!

 

[MrDrClover]

Mortgage insurance is simply life insurance packaged to payoff your mortgage in the event the insured dies. It will only pay if you die or become terminally ill just prior to dying. There are some more specific points that are policy specific and should be explained to you when you talk to an agent of your choice but are best gone over in a consultation. Long story short, it is just life insurance and you should talk to a agent that can handle your needs, preferably one that is in your area. I hope this helps and wish you well.

Jeremy

 

[lifeagent13]

There can be a lot more benefits than JUST death/terminally ill. Those are the big ones, there are many riders (add-ons) to these policies such as disability, or unemployment. But ultimately it is life insurance structured to pay for your mortgage should anything happen to you.

 

[MrDrClover]

There can be a lot more benefits than JUST death/terminally ill. Those are the big ones, there are many riders (add-ons) to these policies such as disability, or unemployment. But ultimately it is life insurance structured to pay for your mortgage should anything happen to you.

He is correct in that but the reason I didn't mention it and recommended that you consult with an agent is because many people confuse the riders as meaning that if you get disabled or unemployed, you get the mortgage paid off. This is not the case. It means that the policy payments will be made for you for a few months until you get back on your feet (usually 6 months). This stuff can be a bit confusing and is best discussed with a consultant so he can go over all the details. All you will get here is basic info and it might not all apply to you depending on what state you live in and what companys that might be appropriate for your situation. Agents do not charge for consultations so you have nothing but time to lose. Hope that helps.

Jeremy

 

[Norwayguy]

What is a DH? .

 

[WinoBlues]

What is a DH? .

Damn Husband. ............

 

[DWilly]

What is a DH? .

Dumb Husband?................

 

[DHK]

"Dear Hubby"........

 

[WinoBlues]

Dangling huMan .....

 

[DHK]

There can be a lot more benefits than JUST death/terminally ill. Those are the big ones, there are many riders (add-ons) to these policies such as disability, or unemployment. But ultimately it is life insurance structured to pay for your mortgage should anything happen to you.

Since ThelmaBurnett is a consumer, you need to be careful in how you talk about various riders.

In short, "mortgage" life insurance is a life insurance that is issued for at least the amount of your mortgage. If the insured passes away while the policy is in force, the beneficiaries receive that amount of life insurance benefits.

The "disability" is typically a rider to waive the payments on the life insurance policy (NOT the mortgage) in the event the insured is disabled and cannot work. If this is a cash value policy, it may include cash payments into the policy... but not cash flow to you.

If you wanted cash flow to you in the event of a disability, you would need a disability income insurance policy.

The "unemployment" rider (that I've only seen with Mutual of Omaha) will make your premium payments for you for a limited period of time (I've seen as much as 6 months) as long as you were unemployed due to being laid off. Again, this is a benefit towards the policy when your cash flow is interrupted.

There is no "unemployment insurance" except through various government/state programs.


ThelmaBurnett, because you are indicating that you're having debt and cash flow problems... it would be a wise thing to purchase some kind of life insurance. What kind, How much, from whom, and when... is up to you and a qualified agent to help guide you through such decisions.

I might also suggest some marriage counseling to help you improve your financial communication and mutual needs.