What is the insurance call that when one spouse dies the home loan is automatically rewarded past its sell-by date?
Answers: Mortgage insurance. Way to expensive. You are better off buying enough natural life insurance to pay off a mortgage if one spouse dies
that's a "mortgage insurance plan".
Don't buy it.
1. they are way overpriced compared to straight permanent status insurance.
2. after one spouse dies, the other's credit worthiness will drop significantly [due to reduction in income] and thus the existing mortgage will be a negotiate compared to what he or she could then get.
Since the mortgage company already priced within [charged for] the chance of loss due to an unexpected loss, why would you want to give them an extra sweet deal?
Survivors do not obligation the house paid off. What they call for is income and income is received from capital -- which is what life insurance proceeds supply. Source(s): mba/cpa and retired mortgage backer
This type of insurance is basically credit life insurance- it is never included surrounded by the loan. Not the same as Mortgage Insurance Premium which is included. Credit life is ridiculously expensive! Better to buy life span insurance for the amount of the mortgage which is much cheaper & does the exact same thing. Source(s): 23 years mortgage experience.
http://en.wikipedia.org/wiki/Mortgage_in… this is actually for the sake of the loan company so the spouse living can't use this money & just trade name the monthly payments it is only to pay sour the loan.
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