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InsuranceDoes State Farm offer mortgage life insurance?

Does State Farm offer mortgage life insurance?

State Farm and its property, auto, and casualty insurances provide life insurance too. That said, we can inform you that mortgage life insurance is merely another life insurance with specifications.

Mortgage life insurance has another usable name: Mortgage Protection Insurance (MPI). It is included in State Farm’s term life insurance services.

You may ask — does State Farm offer mortgage life insurance? Terms like MPI or PMI are confusing enough. In addition, mortgage life insurance is not similar to mortgage insurance. Therefore, the answer requires elaboration.

State farm, the century-old industry, holds grandeur and paved its path to many forms of insurance. A little window view of it might interest you with a more precise answer.

State Farm and life insurance

This legendary insurance company first placed its footprint in the insurance world in 1922. Though it started with auto insurance, especially with better rates for farmers, it has flourished in various insurance branches.

Life insurance is just another branch of services accommodated by State Farm. It includes term, whole, and universal life insurance. Mortgage insurance is specified term insurance.

In most cases, you won’t receive an online quote for mortgage life insurance. It is also hard to see it as an individual policy in State Farm. Therefore, the question: does State Farm offer mortgage life insurance? It can be hard to utilize for many. However, you can convert your term life insurance into mortgage life insurance.

What is mortgage life insurance? 

Interestingly, the literal meaning of the word mortgage is “death pledge.” Because it ends with its repayment or if the pledger fails to repay. How does that happen? The lender takes away the property on which the borrower took the mortgage or the loan.

Mortgage life insurance is to insure the insured to repay the insured’s mortgage debt after he dies. The set beneficiary is one main contrast that makes mortgage life insurance distinct from traditional term life. The lender or the bank gets its name selected for the beneficiary.

Mortgage life insurance vs. term life insurance

Like term insurance, mortgage life insurance is set for a limited time. Mortgage life insurance holds a unique power to designate the beneficiary. Though some insurance policies let the insured decide the beneficiary with conditions.

Another difference we haven’t discussed yet is the death benefit. Unlike the conventional term life’s increasing amount of death benefits, it decreases over time in mortgage life insurance. The use reduces as the policy gets closer to filling up the loan amount.

How does it work?

You can take a 20 or 30 years term for mortgage life insurance. Then you can adjust the annual or monthly premium, which has the target to cover the mortgage. As it covers more each year, the benefit decreases gradually. The decrease starts after an initial period.

The policy is used to dismiss the loan or mortgage when the insured dies within the term.

Offers from State Farm

State farm proposes term policies for 10, 20, or 30 years. Initially, the death benefit remains normal for the first 5 years. The decline in death benefits starts after that period but is not less than 20% of the original nominal value.

Another added quality of State Farm’s policy is you can get your premiums back after the deactivation of the term. It is an excellent opportunity for the insured if he doesn’t need to use the death benefit.

Moreover, Instant Answer Term Insurance is another feature of State Farm’s term policy. It is set with a max period of 10 years for max age of 50. The death benefit is $50,000. This can be ideal if you need a lower amount for mortgage life insurance. Almost all the policies under State Farm require a medical exam except this one.

A thing to note is the premiums of State Farm increases after a set period. Noticeably, mortgage life insurance demands comparably a higher premium.

The premium price depends. First of all, it depends on your mortgage amount. Then it is determined by how you adjust the mortgage balance with the years of the term. Nonetheless, the premium can alternate with your age, gender, and health state.

State Farm lets you choose a free quote’s coverage and the time length. Sample prices for term life premium are also available on State Farm’s website.

I suppose this answers — does State Farm offer mortgage life insurance? But you need to contact their agent to know more about customized policies like mortgage life insurance.

Is mortgage life insurance a wise choice? 

We can’t say mortgage life insurance is better or even better than traditional term life. However, there’s always a “but.”

In normal cases, conventional term life is far better than mortgage life insurance. Because you can choose your beneficiaries, who can use the death benefit for mortgage payments and other needs. The death benefit is also bigger. Thus, the elaboration on the query — does State Farm offer mortgage life insurance? It may help you think twice.

But if your sole concern is to pay the mortgage, MPI can be a solution. In addition, if your health conditions are not convenient, mortgage life insurance can be your savior.

What are the disadvantages?

The number one disadvantage is the decreasing number of death benefits. Secondly, you can’t choose your family as a beneficiary. Therefore, the family you leave behind won’t get any death benefit. Thirdly, mortgage life insurance demands higher premiums than the average term policies. It may prove to be a loss for the people maintaining good health.

Conclusion

Buying a mortgage life insurance through State Farm is as simple as buying term life. You may skip the med exam with simple health-related questions for $50000 coverage. However, underwriting is an essential process of any life policy; your application needs to go thorough too.

In addition, bear in mind that you may need to buy the policy through the State Farm agent because most of the procedures are only available through their agent. However, around 19,000 agents work under State Farm. An agent can assess better with the question: does State Farm offer mortgage life insurance?  Moreover, you can understand the discount and rider options better with the consultation of an agent.

Lastly, considering the reasons, you might even think of buying a term life than a mortgage life. However, mortgage life insurance may also be a fit when you evaluate your circumstances.

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