Mortgage Life Insurance Planning

Case Study: Term Insurance

Jack and Jill are both 35 years old
They have two young children ages 8 and 6
They sold their condominium and bought a townhouse
Their townhouse mortgage is $1,000,000
Their mortgage amortization is 25 years

Jack and Jill have the same fear
If one or both of them were to die then the remaining family members would be in financial disaster
The purpose of the mortgage life insurance is to pay off the mortgage in the event of accidental death

Jack and Jill selected mortgage insurance from their lender as a condition for giving them the mortgage but the insurance premiums are high

I was able to give Jack and Jill
Term insurance policy for 25 years
$1,000,000 death benefit
Monthly Premium of only $132.30

The Advantage is the low Monthly Premium of only $132.30

The Disadvantage is after 25 years the policy terminates leaving Jack and Jill with no life insurance coverage at age 70

The Disadvantage is after 25 years the policy terminates without giving back Jack and Jill all the monthly premiums they paid over the past 25 years

A better and more long-term Mortgage Life Insurance Plan is for Jack and Jill to have Whole-Life insurance or Universal Life insurance