If you are putting a small amount down to buy your home, the lender may require you to buy mortgage protection insurance. This would pay the lender your monthly mortgage payment if you become disabled, or pay off the loan if you die.
However, the payment is made to the lender, your family gets nothing in payment from the insurance.
On the other hand, if you are not required to buy mortgage protection insurance, you may still want to buy mortgage term life insurance.
It's basically a level term life insurance policy lasting for the duration of your home mortgage loan, which may be 15, 20 or 30 years. The amount of life insurance remains level throughout the policy and the premiums are the same each year.
If you pass away, the money goes to your beneficiary that you chose, not to the lender. So, your family would have money to make the mortgage payments, or pay off the mortgage. The money can be used for any reason, so your family could pay for living expenses, cost of education, or anything else they choose to use it for, not just the mortgage.
Learn more about mortgage term life insurance and compare plans today.