The top 3 reasons why term insurance protects your home better than mortgage insurance

Daniel Keller

Daniel Keller

Daniel provides insurance solutions in both the individual and small business markets, assisting clients with their personal health, life, disability, critical Illness and employee benefits insurance needs. As a broker, he can properly assist his clients with protecting their health and the wealth.

When it comes to protecting your mortgage, your bank wants you to think that mortgage insurance is your only option. But it’s not. Term insurance can offer more protection...

Share Post:

Share on facebook
Share on linkedin
Share on twitter
Share on pinterest
Share on email

When it comes to protecting your mortgage, your bank wants you to think that mortgage insurance is your only option. But it’s not. Term insurance can offer more protection, more flexibility and more value than traditional mortgage insurance, and often for a better price.

 

1. More protection:

With mortgage insurance, your bank actually owns the policy, not you. If you were to die before your mortgage was paid off, the bank would get the proceeds from the policy. Your estate would not receive a cent. So, who is really protected here…you or your bank? Term insurance pays the proceeds to your beneficiaries who can then choose to pay off your existing mortgage…or not.

 

2. More flexibility:

Mortgage insurance from your bank is tied to the home it was purchased for. If you move, refinance or renegotiate your mortgage, you cannot transfer your policy and you will have to requalify. Term insurance is attached to the person, or persons, the policy is covering and stays with you regardless of where you live, how many times you move or if you refinance your home.

Plus, a term insurance policy can be converted to an eligible permanent plan any time prior to the policy anniversary that is closest to the life insured’s 71st birthday.

 

3. More value:

You may not have considered this, but mortgage insurance only covers the outstanding balance of your mortgage. In other words, the benefits of your policy decrease as you pay off your mortgage, even though the cost you pay remains the same. When your mortgage is paid off, the policy is no longer in effect. With term insurance, the face value, or death benefit amount, doesn’t change regardless of whether your mortgage is $100,000 or $0.

Leave a Reply

Your email address will not be published. Required fields are marked *

Keep Reading

Some posts we think you'll like

Do you know how much insurance you really need?

If your family counts on your income then you need insurance for their financial security. It’s just that simple. What type of insurance you need and for how long you need it is where your personal situation plays a role.