Is this a good idea or a hoax?
If you've recently taken out a mortgage, we'd recommend you consider a term life insurance plan that includes your mortgage and income replacement to provide for your loved ones when you pass away. The most common suggestion is to put 8-10 times your annual income in a 30- or 20-year life insurance plan.
Mortgage life insurance costs more than guaranteed level term insurance. It's typically sold as a "Non-Medical" product. Non-medical means you are not required to have a physical exam (including blood and urine samples) to qualify for coverage. The application process is simplified. It is quick and easy, asking a limited number of health questions. Mortgage Life Insurance is generally sold with only two classifications: Standard Tobacco and Non-tobacco.
Making sure your loved ones are cared for financially if you die prematurely or become disabled is of primary importance. That's the big picture.
is mortgage insurance the same as life insurance
If you've recently refinanced or bought your first home, you can expect to receive multiple offers from companies that sell mortgage protection insurance. Some of these offers may be frauds.
Scammers might use public information to reach potential victims, such as the sample postcard below. Scammers might be looking to steal the money you have. However, they are also seeking your data to be able to commit identity theft, so more than your money is at risk.
Life insurance for mortgages is specifically designed to make your mortgage payment upon loss of income or disabled. The policy typically has an increasing benefit (face) value that is reduced in proportion to the decrease in the value of your mortgage. The insured should name your spouse or a third party as the beneficiary so they can pay off your home in one lump amount. Your beneficiary could also keep the death benefit and continue to make monthly mortgage payments.
The good news is that the annoying mailers you receive are also accurate about the cost. It's generally quite affordable to buy $250k in Life insurance for a term (assuming you're in good health).
A few independent life insurance companies use these "life moments" to provide life insurance. They're not trying to fool you into believing they are associated with your lender, but they want you to let them know of their services or products.
It could be surprising; however, knowing who has recently purchased a house can be a public record. The information on who bought or refinanced mortgages for homes and the lender, the loan amount, and the address to which the loan is tied can be found in the local courthouse. The companies will offer life insurance and mortgage protection to prospective homeowners.
Once you pay off your mortgage, you will no longer have a lender requiring you to have homeowners insurance. While you aren't federally required to have it, keeping your coverage is essential since it protects you financially if your home incurs significant damage or someone is injured on your property.
A mortgage protection life insurance policy is a term life policy explicitly designed to repay mortgage debts and associated costs in the event of the borrower's death. These policies differ from traditional life insurance policies. With a conventional policy, the death benefit is paid out when the borrower dies.
Is mortgage protection insurance tax deductible?
No. Typically, mortgage protection life insurance premiums are not tax deductible.