Does Mortgage Insurance Cover Death of Spouse? Does Home Loan Insurance Cover Death?

Does mortgage insurance cover death of spouse? does home loan insurance cover death?

The mortgage lender is the beneficiary of the policy, not your spouse or other person you choose. This means the insurer will pay your lender the remaining balance on the mortgage if you pass away. Money does not go to your family with this type of life insurance.

This differs from a standard term life insurance policy, which is another option if you’re looking for a life insurance policy to help pay off your mortgage if you die. You could choose a regular term life policy with a face value that’s at least the amount of the mortgage that you still need to pay. If you were to die during the policy’s term, your beneficiaries receive the death benefit, which they may choose to use to pay off the mortgage.

Your beneficiaries can use a term life insurance death benefit for anything, so if you feel paying off the mortgage is most important, you should clearly state that in your will.

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