In the world of term life insurance an increasingly less popular variation is mortgage term life insurance. This type of insurance was originally introduced by banks looking to help protect their borrowers from being unable to repay their loans in the case of the account owner passing away before the contract was paid in full.
The mortgage term life insurance provided a way for the insurance companies to get their loans paid off, and also allowed the families of the deceased the possibility of avoiding the financial hardship of maintaining payments of the mortgage. Once the loan owner passes away the mortgage term life insurance contract pays the mortgage company the remainder of the balance on the loan. This can also be quite beneficial to a surviving spouse left without the breadwinner.
Related posts: