What Term Should You Choose?

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What mortgage insurance term should I choose?

What Term Should You Choose?

When applying for Mortgage Protection Insurance, you must decide what term you would like for your policy. Generally, Mortgage Protection Insurance is available in term increments of five years, with total terms ranging from 5 to 30 years. Which term you want to choose depends on what you intend the death benefit proceeds of your Mortgage Protection Insurance to be used for.

If you simply intend for the proceeds to be used to pay off the mortgage in the event of your death, then you can choose a term that only extends as far as the length of your mortgage. If you want to also provide for college tuition for your children, you might choose a term long enough for them to reach college, or set up a trust as partial beneficiary and direct tuition proceeds there. Lastly, if you want the death benefit to help provide retirement benefits to a spouse, then you could consider a long-term on your policy or, again, use a trust.

   

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