Mortgage
Insurance Strategies
Quite simply, 10 Year Term Insurance is a fundamentally
better option than choosing a Bank's Mortgage Insurance. Let
me list the reasons:
Why 10 Year Term Insurance
is better and much Cheaper than Bank Mortgage Insurance
If you are quick paying your mortgage, your bank insurance
premium will be relatively high for a rapidly reducing amount
of insurance. Individual insurance policies maintain
the same coverage. You can reduce the coverage and cost
at any time as your mortgage reduces.
If you have a low interest rate on your mortgage, having
the bank automatically pay off the mortgage may not be the
best choice.
Once approved, the insurance can not be cancelled should
your health become a problem. The bank can cancel your insurance
each time you renew your mortgage.
If you renew your mortgage through a different bank or
credit union to take advantage of a lower interest rate,
you can't take your bank mortgage insurance with you; you
have to re-apply at an older more expensive age bracket.
Families get twice the coverage for the same price.
That is, if you both die there are two policies that pay
off towards your children's benefit.
You own the Insurance Plan and retain control of it.
Your premium and coverage will not change for 10 years.
The bank's premium will change when you renew the mortgage
- usually every one to five years.
If you have other insurance needs you can combine all
your insurance needs and get a lower rate with your
own plan.
If you are insuring mortgages on rental properties, you
can also get bulk rates, transfer coverage to new properties,
and eventually use the proceeds of the plan to pay capital
gains taxes.
Ok, I understand the best option for insuring my mortgage.
But I still need to get a mortgage? - Get an online mortgage application here.
Review the Mortgage Comparison Chart
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Bank
Mortgage Insurance |
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Term
Life Mortgage Insurance |
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When mortgages are renewed, you usually
renew your insurance at the same time and if you have
had a serious illness that would make you uninsurable,
the bank will usually decline the mortgage insurance.
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You own the policy and it is guaranteed
renewable - usually to age 85 although it would be very
expensive at older ages. If you have your health, you
would purchase new insurance at the end of the term. |
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Bank Mortgage Insurance does not
offer preferred rates for healthy people.
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Healthy and fit? Save big with new preferred
life insurance rates that can save 35% or more. |
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The bank's mortgage insurance premium can
change when you renew the mortgage - usually the term
on a mortgage is 3 to 5 years although it could be amortized
over 20 to 25 years. Ask to see the rate schedule - it
will likely have different rates divided into 5 year age
groups - e.g. 35-40;40-45.
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Premiums fully guaranteed.
Personal policies have guaranteed rates. They will have
premiums that stay the same for 10 years or whatever term
you select 10,15 or 20. |
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You have a separate policy for the mortgage
and other policies for other life insurance needs.
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You can combine all your insurance
needs and get a lower rate with your own plan.
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The bank controls the money and pays off
the mortgage - it is a declining amount
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You own the insurance and it is not tied
to the mortgage lender. Complete freedom to change mortgage
lenders. |
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If you renew your mortgage through a different
bank or credit union to take advantage of a lower interest
rate, you can't take your bank mortgage insurance with
you; you have to re-apply at an older more expensive age
bracket. |
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Personal Insurance Policy
Your beneficiary can take the money if it is your own
policy and keep the mortgage if it is to their advantage.
If a couple owns the home, you get two separate policies
which doubles the payment to the estate if both partners
die. For example, if you have $150,000 of mortgage insurance,
the amount declines as you pay down the mortgage. With
your own policy, you would each have $150,000 for a
total of $300,000 and it would not be decreasing. While
very unlikely, it is an excellent benefit at no additional
cost. You control the policy.
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Schedule an appointment with
me and I'll explain the details around Mortgage Insurance,
and why Term Insurance can save you money.
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