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Mortgage life insurance can be purchased through your mortgage lender, or from an outside insurance company. If you die before the loan is paid, the life insurance pays the remaining balance in full. If you use your lender as the source of insurance, the premium will be added into your loan amount. Mortgage life insurance is usually paid separately from your loan.
Lender Mortgage Life Insurance
Your lender can build the cost of the life insurance into your loan payment. This is a convenient way to protect your family from foreclosure. However, before you sign up, this insurance can be expensive, so you must be sure that the increase in your monthly payment is within your budget.
Other Sources of Life Insurance
If you decide the life insurance from your lender is too expensive, check with several other insurance companies in your area. If you are able to find one that offers coverage for a lower price, you will have to make the payment directly to the insurance company. Be sure to research and get at least three quotes before you make a decision.
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