Should I buy mortgage insurance or life insurance?

Mortgage life insurance is beneficial for people who buys their property by taking a mortgage. The policy pays off the mortgage if the policy holder dies within the mortgage term. This will help the family to protect their home and become mortgage free, even though the main income used to make mortgage payments is no longer there.

Family life insurance (Level Term Insurance) pays out a lump sum if the policy holder dies while they are covered by the scheme. The homeowner normally holds the policy with personal life insurance. Unlike mortgage life insurance benefits, this money can be spent wherever the beneficiary feels fit.

Mortgage life insurance protects the balance on the mortgage, which decreases as the mortgage is paid off. Level Term life insurance coverage usually remains the same and is not related to a mortgage.