How Does Life Insurance On A Mortgage Work? 
When you purchase traditional life insurance to cover your mortgage , you are buying a policy that will pay the same death benefit for the entire length of the policy , regardless of what your mortgage is at that time . Most people leave the death benefit to a personal beneficiary who they can trust to pay off the mortgage , or to a trust that stipulates to use the death benefit in that fashion . However , one of the nice things about using life insurance for mortgage protection , is that a beneficiary may decide to keep the mortgage and use the death benefit in another way , if that is more favorable to them . This may especially be true at this time of very low mortgage interest rates . Some people take the step of reducing their policy coverage as their mortgage gets past a certain point of being paid off . 