Read this tip to make your life smarter, better, faster and wiser. LifeTips is the place to go when you need to know about The Basics of Mortgage Term Insurance and other Mortgage Protection Insurance topics.
When shopping for a Mortgage Protection Plan, you may run into a special group of plans that offer a decreasing death benefit. Decreasing death benefits often work really well for consumers who are concerned about their life insurance paying off their mortgage in the event of their death. You see, a Mortgage Protection Plan that offers a decreasing death benefit has an initial death benefit that could cover the entire amount of your mortgage. Over time, and according to a predetermined schedule, this death benefit decreases, just like the balance owed on your mortgage does.
A Mortgage Protection Plan with a decreasing death benefit offers a level, affordable premium because the low cost of insurance in future years when the death benefit is low helps to reduce the high cost of insurance in the early years when the death benefit is at its highest.
When considering a Mortgage Protection Plan with a decreasing death benefit, it's important to determine whether or not you have plans to take equity loans in the future. An equity loan will increase your debt and a decreasing death benefit will then be less fitting for your situation.