The mortgage life insurance insures only the outstanding mortgage balance. As you pay your mortgage, the the mortgage life insurance decreases as benefit to match the mortgage balance.
With the personal life insurance, you are insured with a level benefit amount. Your mortgage balance decreases over time, but your insurance does not. The longer you pay your mortgage, the larger the difference between your life insurance and your mortgage balance becomes. This difference can be seen as unrealized equity.
Another way for your to build equity with life insurance is to purchase permanent life insurance where you know there will be a payment to your kids or grandkids whenever you pass away. This is how you build equity for the next generation.
You can also build equity with life insurance for yourself. It is usually done with the Whole Life and the Universal Life products where cash values/investments that can be accessible to you accumulate over time.
Yet another way to build equity is to take a Whole Life insurance where the insured is your child. This way you build cash values that will be accessible to her/him.
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