The Veteran’s Mortgage Life Insurance (VMLI) program begin in 1971, and was intended to financially protect eligible veterans’ home mortgages in the event of death. This insurance is only issued to veterans with severe disabilities who received grants for specially adapted housing.
How It Works
Currently, the maximum amount of VMLI allowed to an eligible veteran is $90,000. If the Veteran dies before the mortgage is paid off, the VA will pay the amount of money still owed on the mortgage up to $90,000. Effective October 1, 2011, this amount will increase to $150,000 and on January 1, 2012, increase to a maximum of $200,000.
VMLI coverage will remain at $90,000 until the mortgage balance goes below $90,000. Once the mortgage goes below $90,000 the insurance coverage will decrease at the same rate as the mortgage amount. This reduced coverage cannot be reinstated for that particular home. However, if the home is sold and a new home is purchased, the veteran becomes eligible once again for the maximum amount of coverage. Veteran’s can retain their VMLI coverage pass age 70 but no coverage will be issued after age 69.
VMLI insurance will only pay the outstanding mortgage balance to the mortgage lender. No insurance is payable if the mortgage is paid off before the death of the insured or if it was paid off by other mortgage insurance before the VMLI payment is made. Therefore, if the veteran has purchased mortgage insurance in addition to VMLI, a veteran’s next of kin would be encouraged to contact the VA first for the payment of the VMLI benefits and then file a claim with other mortgage insurance programs. Also, if the title of the property is shared with anyone other than the veteran’s spouse, the insurance coverage is only for the percentage of the title that is in the veteran’s name.
VMLI premiums are determined by the age of the veteran, the outstanding balance of the mortgage at the time of application and the remaining length of time of the mortgage. If the veteran is in receipt of monthly compensation or pension payments, then premiums will automatically be deducted from their monthly checks. If such payments are not being received, the veteran may make direct payments, on a monthly, quarterly, semiannual or annual basis.
For additional information visit the VA website at www.insurance.va.gov or call Toll Free 1-800-669-8477.