For years, mortgage life insurance has been the topic of heated debate among financial planners, lenders, and insurance agents. One side argues the utter waste of money it is, while the other side argues the practicality of it. With opinions flying so wildly, which side of the debate is right?

A mortgage life policy is designed to pay off the balance of your mortgage in the event that you die or become disabled. With a person's home being their primary asset, the concern that it be protected is understandable. This is especially the case when someone has children they want to provide a home for in the event they are no longer alive. However, what are the implications of purchasing it?

While the basic principle of mortgage life insurance is a sound one, there may be better ways to spend your insurance dollars. Most financial planners that criticize it do so because it is so limited in scope. Typically, narrowly targeted insurance is discouraged as the protection it offers is restricted. On the other hand, a large basic life insurance policy has a wide range of value. While it could also be used to pay off your mortgage, it could be used in a myriad of different ways. In fact, someone could determine they did not want to pay off their mortgage and use the money is different ways; the choice is always available. The primary downside to a mortgage policy is that there are no real options - it can only be used to pay off our mortgage.

However, there may be certain circumstances in which it can be a sound choice. For example, if an individual already had health issues and would not qualify for regular life insurance, mortgage life insurance may be the only way to get coverage. Because of the very flexible qualification requirements of these policies, health issues may not impede coverage.

Another redeeming characteristic is that it is fairly inexpensive, especially considering the value it provides. Because it is narrow in scope, this type of insurance is not as costly.

Is mortgage life insurance a waste of money? Although the answer will vary from person to person, the short answer is "not necessarily". There is a time and place for many financial instruments, such is the case with mortgage life insurance. If the mortgage is a primary concern for an individual, it may be worth the decreased cost to go with this type of policy instead of regular life policy, especially if the surviving spouse has income to survive on. This could provide security and a large asset for a spouse that, for the most part, is financially sound.

On the other hand, if there are no distinguishing reasons for going with a mortgage life insurance policy, a basic life policy would probably be of better use. For example, a term policy would be inexpensive but would also provide for all the little financial issues that may arise, as well as the mortgage.

Terry Smith is a succesful webmaster and publisher. You can find more life insurance information and tips at Mortgage Life Insurance