The death benefit of a typical mortgage insurance policy must be used to pay the mortgage. The lender is the owner and sole beneficiary of this coverage and the insurance company pays the lender upon the death of you or your spouse.
What if your spouse wants a say in what is done with your life insurance proceeds? Perhaps you have a very low mortgage interest rate and can do better by investing the insurance proceeds. Or maybe the mortgage can be renegotiated to a level that provides a comfortable payment leaving the balance of the proceeds to go toward other immediate needs such as a new roof, your child’s education, or other purposes.
If you have mortgage insurance through your lender your heirs don’t have the freedom to make these decisions.
Personal insurance protection allows you to maintain control over your life insurance. You own the coverage and you can name your own beneficiary. Your beneficiary can decide what the best use is for the insurance proceeds. It may be to pay off the mortgage, or it may not be. They now have freedom to make their own decisions.