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If you’re taking the time to compare mortgage rates you’re likely going to also be shopping around for mortgage life insurance. In fact, when you get your mortgage your lending company is probably going to offer you life insurance on the mortgage as part of the process. Seems pretty simple right?
But stop for a second. There’s some serious issues you need to consider. Is mortgage life insurance through your lending institution the right product for you? What about the rates – is it your least expensive alternative? If you’ve taken the time to find the best mortgage rates, shouldn’t you also take the time to ensure you’ve got the best life insurance rates?

Let’s start off with how mortgage life insurance actually works. Mortgage life insurance is known as creditor insurance since it’s offered by creditors. Remember that the creditor who’s offering you the mortgage life insurance rates isn’t shopping around to find out if it’s the best rate available. They simply offer you whatever insurance product their institution offers, without regard to price.
Mortgage life insurance is also known as decreasing term insurance. Of course it’s not the premiums that are decreasing, it’s the coverage. While your premiums stay the same for the duration of your mortgage, the coverage you’re receiving is actually declining with your mortgage balance. Lower mortgage over time means you’re receiving less coverage.