Having Multiple Mortgage Protection Policies

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Is it a good idea to have more than one Mortgage Protection Policy?

Having Multiple Mortgage Protection Policies

When you initially purchase your Mortgage Protection Policy, you do so with a certain target for the death benefit. You definitely want the death benefit to pay off your mortgage, but maybe you also want it to pay your kids' college tuition costs and replace your income for a few years. But what happens if you get an equity loan, rack up some debt, or have another child before your policy runs out and you end up underinsured? Should you buy another Mortgage Protection Policy?

The purchase of another Mortgage Protection Policy could be a bad move. It might result in premiums that are too high, and having multiple policies can make bills and policy activity harder to keep up with. Instead, you should first complete a form with your current insurance company that requests an increase in the death benefit (or face amount) of your policy. You will need new medical underwriting and may pay a slightly higher premium. You can compare your results with that of a new, supplementary policy and decide which is best.

   

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