What is veterans' mortgage life insurance (VMLI)? Simply put, it's a specialized type of policy designed to help the families of disabled veterans, should the veteran die while holding a mortgage. If the veteran is no longer around, coverage allows the spouse or partner of the veteran to remain in the home and not be saddled with mortgage payments.
There are some restrictions and rules to which this type of policy adheres, however. Let's take a closer look at veterans' life mortgage insurance and see how it can benefit those who've served our country.
According to the U.S. Department of Veterans Affairs, the requirements for mortgage insurance for veterans are fairly strict. You must meet the following conditions:
Keep in mind that you must meet all of these requirements. If your injury, for example, occurred after you were discharged from service, you wouldn't be eligible. Only service members and veterans can apply — not their family members or other interested individuals.
One of the primary requirements for veterans' mortgage insurance is that you must have applied for and received a SAH grant. The Department of Veterans Affairs provides these grants to service members and veterans with severe disabilities brought about by their service.
These grants allow the recipients to build, remodel, or purchase a home with adaptations made that will enable them to lead a life free of restrictions.
A typical example would be making modifications to a home, allowing it to be wheelchair accessible, with wider doorways and ramps at entrances. The amount available for the grants changes year to year, but it's currently set at a little over $100,000. Applicants for VMLI must show that they've received a SAH grant and used it to purchase or make renovations on a home to meet their needs.
The VA will make the final determination on whether your disabilities render you eligible for veterans' mortgage life insurance. Still, in general, the following are some of the conditions that would allow you to apply for VMLI:
Your VA agent can help you determine if you're likely to receive VA mortgage life insurance, and they can help you fill out the application, which is available online.
A mortgage life insurance policy for disabled veterans has one purpose: It will pay up to $200,000 to the mortgage holder if the veteran passes away while holding the mortgage to their home. The money is paid directly to the bank or other lender; the veteran's survivors won't receive a check.
Veterans' mortgage life insurance is a decreasing term life insurance policy. This means as you pay down your mortgage, the amount the lender would receive also decreases to match the current balance on the mortgage account. Once you've paid off your mortgage, the policy would end; there would no longer be a potential benefit.
Therefore, your premium for the coverage will be determined by how much you owe and the number of payments you still need to make to pay off the mortgage.
Disabled vets can apply for either of the two primary types of life insurance: term and permanent. An Ethos Life term policy will help you to be prepared for expenses should you pass away during the life of the policy, which can be anywhere from 10 to 30 years. A term policy can help pay for educational expenses, housing, and more. It's especially important if you have children or a dependent partner.
Permanent insurance, such as Ethos' whole life policies, last for the rest of your life and can help pay for anything from medical expenses to funeral costs. A whole life policy also offers a cash value, which you can draw from during your life if you need an influx of cash for any purpose.
Check out Ethos' coverage calculator to better understand how much online life insurance you and your family need.