Make sure your biggest investments is covered

Don't confuse mortgage life insurance with mortgage insurance. The latter is private insurance that must be taken out as a condition of some conventional mortgages. While mortgage life insurance can protect you—the borrower—and their heirs, mortgage insurance protects the lender if the mortgagor isn't able to fulfill their financial obligations.

The death benefit goes to your beneficiaries. The money from the policy can be used for anything, including paying off other debts, providing an income for your family, or covering funeral costs. While the money from the policy does not have to be used to pay off the mortgage specifically, it can be a good idea to use at least some of it to do so. This way, your family will not have to worry about making mortgage payments in addition to everything else they are dealing with after your death.

Selecting the right amount of coverage for you depends on many factors, including your family, health, age and financial priorities. The two main types of life insurance are: Term life insurance - Term life insurance lasts a specific amount of time, such as 10, 20 or 30 years. These policies tend to be more affordable than permanent life options and may be ideal for young families. Permanent life insurance - Permanent life insurance refers to policies that never expire. However, this lifelong coverage comes at a cost. These policies tend to be more expensive than term life.

Yes you can. You may have access to policy cash value through either a withdrawal or as a loan from the insurance company using the policy as collateral. If you take a withdrawal, your policy values will immediately be reduced by the withdrawal amount. If you take a loan, depending upon the type of insurance you have, your policy values may continue to grow. You are not required to repay the loan, or the loan interest, during your lifetime. However, if you choose not to, any outstanding loan balance will reduce the amount of death benefit payable to your beneficiary.