Direct answer
Yes, you can use a standard life insurance policy to pay off a mortgage, as the death benefit is paid to your beneficiaries who can then choose how to use the funds. Unlike mortgage protection, which is typically tied to the decreasing balance of your home loan, a life insurance policy provides a fixed benefit that remains available for other expenses if the mortgage is already paid.
Financial planning guidelines from the National Association of Insurance Commissioners regarding death benefit utilization. For additional information about life insurance policy provisions and consumer rights, see the National Association of Insurance Commissioners‘ consumer resources.
What this means for you
Yes, you can use a standard life insurance policy to pay off a mortgage, as the death benefit is paid to your beneficiaries who can then choose how to use the funds. Unlike mortgage protection, which is typically tied to the decreasing balance of your home loan, a life insurance policy provides a fixed benefit that remains available for other expenses if the mortgage is already paid.
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This page is informational and not a coverage guarantee or quote.
