Term Life Insurance
What is the best term life insurance to cover a mortgage?
The best term life insurance to cover a mortgage is a level term policy with a term equal to the mortgage term (15, 20, or 30 years) and a coverage amount equal to the mortgage balance. Level term insurance keeps the death benefit constant throughout the term. Mortgage protection insurance decreases with the mortgage balance.
Key Points
- Level term insurance: death benefit stays constant throughout the term
- Term equal to mortgage term: 15, 20, or 30 years
- Coverage amount equal to mortgage balance
- Level term is better than mortgage protection insurance (decreasing term)
- An independent agent can compare term life rates for mortgage protection