Tell Me Why I Need Mortgage Life Insurance
Mortgage Life Insurance is insurance that is designed to pay off your mortgage in case of your death if the loan is not fully paid. Not something enjoyable to think about, but thinking about your family becoming homeless is less pleasant yet.
A lot of these types of policies decrease in term, that is the value of the policy decreases with time, assuming that the mortgage will also decrease.
This kind of policy does not work very well in today’s world, when a lot of families move often, or may have many lenders over time because of refinancing. Realizing the difference between fixed and decreasing mortgage life insurance will assist you in making up your mind.
When you discuss lenders’ mortgage life insurance, you are usually discussing term life insurance. This means that your policy will not be there for you through the years. If you sell your house, or even if you remain in the same home but refinance it, you will lose your insurance. When you have a policy with your lender, any change in that lender relationship automatically triggers a cancellation in the policy. People today frequently refinance their homes, or sell to move to a more comfortable home and need the coverage to stay constant.
The way to prevent this is to get mortgage life insurance from an insurance company, not from a bank, so that any home you live in will be protected.
This is one, but not the sole benefit of mortgage life insurance from an insurance company. In addition, never underrate the value of dealing with a professional insurance counselor, rather than a banker who is selling an insurance product.
Owning and controlling the mortgage insurance policy for your home will give your family a great deal more protection. Policies from banks or lenders are group types that the lender holds. These policies frequently have restrictive clauses ,for example a five year review.
If you are reviewed at a stage when your health may not be at its greatest, the lender can simply cancel the policy, even though you have kept your premiums up and need you policy right now.
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More Examples:
- $200000 mortgage insurance (life) for a 33 years old male (non-smoker) and a 34 female (non-smoker): Royal Bank of Canada: $39.24 per month. InfoPrimes.com: $29.13 per month. Savings: $1820 over 15 years.
- $313576 mortgage insurance (life) for a 38 years old male (smoker) and a 36 female (smoker): TD Canada Trust: $116.21 per month. InfoPrimes.com: $76.11 per month. Savings: $12030 over 25 years.
- $85000 mortgage insurance (life and disability) for a 38 years old male (non-smoker): Laurentian Bank: $39.1 per month. InfoPrimes.com: $21.73 per month. Savings: $5211 over 25 years.
- $100000 mortgage insurance (life) for a 46 years old male (non-smoker): CIBC: $46.87 per month. InfoPrimes.com: $34.96 per month. Savings: $2858 over 20 years.
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