Life insurance is usually not required as a stipulation of getting a mortgage unless the down payment is very low. Then the borrower is required to buy a type of insurance called "PMI", or Private Mortgage Insurance. This coverage would pay the lender what is owed to them in the case of the borrower's death.
However, many people do use regular life insurance to cover their mortgages. Term life insurance can be purchased in the same number of years as the mortgage; is a reasonable cost for that what can be a large amount of coverage; the benefit does not decrease as the mortgage goes down; and it goes to the beneficiary of your choice.
Especially with today's low mortgage rates, it may not be in the best interest of the beneficiary to pay off the mortgage. Having a life insurance benefit to invest or pay other bills could allow the survivor to keep paying the mortgage and keep the home. Or they could pay it off and keep the remainder of the life insurance proceeds.
.JPG){kind=avatar}
However, many people do use regular life insurance to cover their mortgages. Term life insurance can be purchased in the same number of years as the mortgage; is a reasonable cost for that what can be a large amount of coverage; the benefit does not decrease as the mortgage goes down; and it goes to the beneficiary of your choice.
Especially with today's low mortgage rates, it may not be in the best interest of the beneficiary to pay off the mortgage. Having a life insurance benefit to invest or pay other bills could allow the survivor to keep paying the mortgage and keep the home. Or they could pay it off and keep the remainder of the life insurance proceeds.