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Do You Recommend Mortgage Life Insurance?

2011 April 18

No. These policies provide a death benefit equal to the amount of your mortgage in the event of your death. Mortgage life policies typically start out with premiums equal to or higher than level term life insurance policies. Each year the mortgage life plan is in force, the amount of coverage goes down as the amount of your mortgage goes down – but your premium stays the same. In essence, your policy loses value through the years. The premium and death benefit on a level term life insurance policy, however, remain the same for the entirety of the policy, thereby representing a much better value.

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