Why Do You Need Life Insurance On A Mortgage? 
The type of insurance that is required to get a mortgage if less than 20 % is offered as down payment for a home is called PMI -LRB- Private Mortgage Insurance -RRB- . PMI protects the lender in case of foreclosure . Life insurance that protects the borrower in case of the borrower 's death is generally not required for mortgages . However , many borrowers buy life insurance to pay off the mortgage if they should pass . That way their family can stay in their own home even if there is no longer enough income coming in to make the house payments . 