Agent, Rural Mutual Insurance Co., Union Grove, WI
If you were to pass away suddenly, who would pay your outstanding mortgage on your home? Having a life insurance policy helps protect your family and the mortgage lender by providing money to help pay the existing mortgage in the event that you pass away suddently and your cause of death was not excluded by the policy.
You do not need to have life insurance with a mortgage. If you borrow more than a certain amount, you will need to purchase PMI (private mortgage insurance) that will repay the lender what is owed them, if you pass away.
Life insurance, on the other hand, will pay off your entire mortgage and leave the excess to your beneficiary to pay other bills. If your mortgage interest rate is so low that your beneficiary wants to keep paying the mortgage and invest the life insurance proceeds, they can so that, with regular life insurance.
So, while life insurance is not required with a mortgage, it is an excellent idea.
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Life insurance, on the other hand, will pay off your entire mortgage and leave the excess to your beneficiary to pay other bills. If your mortgage interest rate is so low that your beneficiary wants to keep paying the mortgage and invest the life insurance proceeds, they can so that, with regular life insurance.
So, while life insurance is not required with a mortgage, it is an excellent idea.