Buying life insurance — ugh. I get it, aside from having to admit you are mortal, buying life insurance can be kind of confusing. But, hey, you’ve taken the first step. You’re ready to check it off your list and…
Getting or renewing a mortgage? Your lender is required to ask if you want mortgage insurance. So in the midst of all the paperwork flying around, you think, “Well, insurance that looks after my biggest investment sounds like a good thing.” And it is. But is mortgage insurance better than life insurance? When it comes to protecting your assets, it’s worth taking the time to do some research and compare the two.
Mortgage insurance vs. life insurance: the basics
Mortgage insurance should actually be called mortgage protection. It’s something that is offered by a lender, usually a bank, to cover what you owe that lender on your mortgage should you happen to die during the term of your mortgage (usually three to five years). Life insurance, whether bought through a broker or any number of insurance providers, pays a tax-free lump sum cash benefit to your beneficiaries upon your passing.