Cheaper Alternatives To Mortgage Payment Protection

Mortgage payment protection Insurance is simply insurance that is meant to pay off your mortgage in case of death. The premiums to these insurances can be a bit pricey and you usually get them directly from the lender. But there are other options to consider.

One option to consider as an alternative to morgage payment protection is to get a term life insurance policy to cover the payoff of the mortgage in case of this. This is the least expensive route. Term policies in general have very low premiums, generally the lowest in the family of insurance policies. You can get different quotations from various online insurance services companies. One of the best companies is a company by the name of GE. They offer some of the best rates in the industry and they are reputable as well.

Another option to consider is a policy called the ROP Term policy which stands for return of premium term life policy. Pretty much the way it works is that the premium you pay into the policy will be returned to you under certain circumstances:

Circumstance 1: You purchased a 30 year term policy, at the end of 30 years you do not die, the policy expires and the funds are returned to you.

Circumstance 2: You purchased a 15 year term policy and decide to cancel it in 10 years, a portion of the premium is returned.

Here are examples below: Female 40 years old Preferred plus (does not smoke, no preexisting conditions, average weight, perfect driving record, etc. Annual Premium = $1,200 Return of premium after 10 years is: $12,000 ( $1,200 x 10 years = $12,000)

The advantage of the ROP policy as oppose to the basic term policy is that you will not feel as though your money was wasted. You know that at the end of the policy term, you one of two things would have happened or would have happened. If death takes place during the term of the policy your beneficiaries would be protected and provided for. If at the end of the term all is well, you premium paid over time would be completely refunded to you as per the example above.

Actuaries get paid lots of money to come up with these policies, so worry not, they are hedging that nothing will happen to you so that they don't have to pay out on the Mortgage payment protection Insurance.

You can think about it this way though, what do you have to lose and what do you have to earn. If life throws you a curve ball, you know that you have provided for your family. If life is good to you, you just saved money tax free.

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