Generally, mortgage life insurance from most lending institutions is non-convertible term insurance – there is no cash value.
No premium flexibility.
No ability to move to a permanent life insurance policy if your needs change.
Usually mortgage life insurance covers the exact amount of your mortgage. And your coverage decreases as the mortgage is paid down.
You have no coverage when the mortgage is paid off.
Your lender owns the policy and if you find a better mortgage rate at another lending institution, you will have to re-qualify medically for the life insurance protection.
Your lender automatically pays off the mortgage if you die. Your beneficiary has no choice about how to use the funds, at a time when funds may be required the most.
The cost per $1,000 of coverage generally increases every year. When you think about it, costs may increase while coverage decreases.
Generally most mortgage life insurance is underwritten at time of claim.
Your mortgage life insurance cannot be moved to another institution.