Have you recently looked at how much you’re paying for mortgage insurance? Here are 5 reasons why you should review it:
The thought of having your mortgage paid off if something happens to you is very comforting. But not all insurance is created equal.
1) Term life insurance allows you to name your loved ones as beneficiaries, to use the money as they wish. They do not have to pay off the mortgage. Mortgage insurance typically names the lender or bank as beneficiary.
2) Mortgage insurance sold by the bank has little or no underwriting, which results in higher premiums. Mortgage insurance is typically underwritten when you die and this can result in claims denied due to non-disclosure of relevant health status at the time of purchase.
3) Insurance from lenders usually covers only the mortgage balance, so as the mortgage is paid down, the coverage decreases but the premium doesn’t always decrease. When the mortgage is paid off, you are left with no insurance coverage.
4) Term life insurance investors select a plan that meets their needs, a portion is usually convertible to permanent coverage, without new medical evidence.
5) Mortgage insurance is sold when the mortgage is assumed and/or at renewal. If you change Mortgage carriers throughout the term of the mortgage or you sell your home and assume a new mortgage you a) will have aged resulting in higher premiums and/or b) may have a health risk change resulting in denial of insurance coverage. By purchasing personal term insurance that is not tied to the lender you are locking in your premium costs for both the term as well as subsequent renewals. You can keep the coverage when you change homes or lenders.
If you do not want your spouse or children to inherit a mortgage, term life insurance is the best option if you qualify. Term insurance requires medical underwriting if you have a medical history you might consider a guaranteed policy with no underwriting. These policies would cost more.
For free term life insurance quote please email me firstname.lastname@example.org or call our office 519-756-7171.
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