Protect Your most
Your home is one of the largest investments you will make in your lifetime. When you buy a home, you own a mortgage and your lender offers you a mortgage protection plan. This is a mortgage life insurance plan that protects your mortgage and pays the remaining balance in case of your untimely death. But keep in mind that this plan offered by lenders is not owned by you and its sole purpose is to protect the lending institutions, not you. These plans seem attractive and easy, but aren’t always the best, and only option available to you. There is a better way to protect your mortgage – Term Life Insurance Plans. These are insurance plans where the term of the policy matches the term of your mortgage and are designed to cover the balance of your mortgage should you pass away. These plans are owned by you and protect you and your family and not your lending institution. They are customizable, affordable and a low-cost way to protect one of your largest outstanding financial obligations.
Why Term Life Insurance Is A Better Option Than Bank Mortgage Life Insurance Plan?
Let’s compare the mortgage insurance offered by the bank to Term Life Insurance to figure out which one is a better option for you. The following table will help you explain the difference between the two and will show you the benefits of the Term life insurance plan to insure your mortgage instead of relying on your lenders Mortgage Insurance plan.
|Life Insurance Vs. Mortgage Insurance|
|TRADITIONAL TERM LIFE INSURANCE PLAN||LENDING INSTITUTION MORTGAGE INSURANCE PLAN|
|1. Covers mortgage and many other types of loans and financial needs||1. Coverage is limited to your mortgage only|
|2. You can choose the amount of coverage you need for life, disability and critical illness insurance||2. You can’t choose the amount of coverage and the coverage amount corresponds to the balance of the loan|
|3. Coverage stays the same for the duration of the term||3. Declining coverage with each passing year based on mortgage balance|
|4. You can choose anyone as your beneficiary||4. You cannot choose the beneficiary and the lender is the only beneficiary|
|5. Your beneficiary may spend the money as they want, with no restrictions||5. The lender is the beneficiary & will repay the loan in the event of your death.|
|6. Underwriting is done at the time of application||6. Underwriting is done at the time of claim|
|7. Discounts on your premium if you are in good health||7. No discounts on premiums for healthy people|
|8. You get the best rates based on your own health||8. Rates are same for everyone and the older you are the higher the premiums|
|9. Policy is owned by you and you are the owner||9. Policy is owned by bank and the bank is the owner|
|10. It’s an individual policy and you are in complete control||10. It’s a pooled policy and you have no control|
|11. You remain insured even if you change your lending institution.||11. Your insurance ends if you change your lending institution|
|12. Your premiums are fully guaranteed||12. Your premiums are not guaranteed and will change as you age|
|13. You will remain insured even if mortgage is in default||13. Insurance will become void if mortgage is in default|
|14. Your insurance policy is portable||14. Insurance is not portable and will lapse if property is sold|
|15. Policy is automatically renewable to age 75||15. Policy is not guaranteed at renewal|
|16. Policy is fully convertible to permanent coverage||16. Not convertible to permanent plan and most plans expires at age 70|
|17. Lower cost for same coverage||17. Significantly more expensive|
|18. Coverage is guaranteed for the term of the policy||18. Coverage is not guaranteed|
Life is very unpredictable and can take a wrong turn at any possible moment. If you become critically ill, disabled or die, the financial burden of paying the mortgage is passed on to your family members. Now the question here is would your family be able to afford the monthly mortgage payments or would they have to sell your home? It is crucial to ensure that your loved ones aren’t stuck with mortgage costs after you’re gone. A mortgage life insurance plan will help cover costs and keep your home in your family’s hands.
Always remember that when you are buying a home, mortgage insurance offered by the bank is not the only option- you do have other insurance options. Say “No” to the bank insurance offer and speak to us for your mortgage insurance needs. We have access to all types of life insurance products designed to protect your mortgage at the lowest rates. We will find you a plan with better features and more flexibility than traditional bank’s mortgage insurance that will protect your family and not the bank.
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