Is Life Insurance Needed For A Mortgage? 
Life insurance is usually not required as a stipulation of getting a mortgage unless the down payment is very low . Then the borrower is required to buy a type of insurance called `` PMI '' , or Private Mortgage Insurance . This coverage would pay the lender what is owed to them in the case of the borrower 's death . However , many people do use regular life insurance to cover their mortgages . Term life insurance can be purchased in the same number of years as the mortgage ; is a reasonable cost for that what can be a large amount of coverage ; the benefit does not decrease as the mortgage goes down ; and it goes to the beneficiary of your choice . Especially with today 's low mortgage rates , it may not be in the best interest of the beneficiary to pay off the mortgage . Having a life insurance benefit to invest or pay other bills could allow the survivor to keep paying the mortgage and keep the home . Or they could pay it off and keep the remainder of the life insurance proceeds . 