![]() And the amount of coverage for individual term is flexible and can be for the same as the mortgage amount, or less or more depending on your preference. ![]() On the other hand, individual term life insurance, purchased through a life insurance broker, offers a level death benefit no matter the outstanding mortgage balance. True mortgage life insurance sold by mortgage lenders provides a death benefit that decreases as your mortgage decreases. Mortgage insurance may sound like a good idea at the time, but this kind of insurance can be more expensive and have fewer features than individual insurance purchased directly from a life insurance company. Many people don’t realize that mortgage or creditor life insurance sold by banks and mortgage lenders is quite different than individual policies sold by life insurance brokers. It’s probably a very hectic time in your life as you are focused on house hunting, real estate agents, lawyers, mortgage shopping, changes in family and finances, etc…, so the sheer number of items on your to-do list can be overwhelming.Ĭompared with a spending hundreds of thousands of dollars for a new house, what are a few more pennies per $1000 per month for mortgage life insurance? But did you make the best choice? Keep in mind the bank asks you to make this buying decision when you likely haven’t had any time to do comparison shopping. The cost of the mortgage insurance is then folded-in to your mortgage payment. You go through a few short medical questions, and straight away you’re approved. You’re faced with the uncomfortable idea of leaving a big debt to your family, and the cost seems reasonable when quoted in pennies per $1000 of coverage (the old reduce to the ridiculous approach), so you say “sure”. Suppose you’re buying a home, and your bank or lending institution asks if you’d like to buy mortgage life insurance. ![]()
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