Mortgage protection insurance?
by Mortgage Rates on Monday, October 4th, 2010 | 10 Comments
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mortgage insurance is a rip off and whenever possible you should avoid getting it…. you pay the same premium each month but the actual value goes down each month as you pay off the principle…you are better off with a term insurance policy for the amount of your mortgage.
I’d go with a good term life policy and a disability policy.
Look into a standard life insurance policy that will cover the mortgage and ask for the agent to make sure there is a waiver of premium rider on the policy, this is enexpensive insurance for your insurance. Make sure the company you choose is highly rated by the three rating companies, and that they will either pay the premiums for the rest of your life or convert the policy to a permanent policy and pay those premiums for the rest of your life if you ever become disabled.
In regards to if you become ill or disabled, get a comprehensive disability policy, and you may want to look at getting a decent health insurance policy that is outside of what your work offers. There is also unemployement insurance (to be trueful I am not very familuar with this so I can’t comment on how it works).
The good thing about what you have already done, that is not buying the mortgage insurance through the mortgage company is that now you get to maintain control of how the insurance proceeds are used and by whom. You want to find a compitant and trustworthy insurance professional to help you find the right tools to cover you for all of your concerns. I want to also thank you, as an insurance professional it is refreshing to see someone out there that does have these concerns, because they are real and valid concerns to have, and planning for the worst now will allow you to not have to worry about it in the future.
Best regards.
Why is it compulsory? I’ve never heard of a lender giving you the loan, without any “compulsory” things already in place.
i hope dis ill helps u……..
Mortgage protection insurance is just a fancy word for term life insurance. It’s decreasing term life. Your standard term or whole life insurance will accomplish the same thing but doesn’t decrease as the mortgage decreases. It does not cover you if you become ill or unemployed. I’m not aware of anything if you become ill or unemployed. Disability insurance will cover you if an illness renders you to become disabled.
With the mortgage insurance, you also end up paying more interest. Companies who offer it often tack it on to your mortgage creating more interest over the 30 years. I would recommend getting term life insurance through either the company you insured your home through, or an independent company.
You should look into AFLAC through work for disability.
Hello Serious,
Talk to your loan officer and ask him/her about NO MI products. At 80% Loan to value, no mortgage insurance is required.
Hope this sheds some light.
Daisy
there are companies that have policies that have a benefit for other than just death. Check out Mutual Of Omaha, I think they have something. But I am sure there are other companies that have products.
Tip-Most likely not a good idea to buy it from a lender. Talk to an insurance agent who has a license. Banks know banking and Insurance Agents know insurance.
Ok I see this mistake all teh time on teh internet so once and for all.
There are two things we are talking about here PMI which is compulsary on over 80% funding loans that will pay the bank a benefit if you default for any reason and your family gets no benifit. All of those postcards/letters/ whatever in the mail talking about mortgage continuation or mortgae protection are totally different.
All those plans are what we call limited or express underwriting so they take a large group of healt situations and tag one rate on the group that may be good for the sick and twice the appropriateprice for the healthy plus they are unisex which removes the advantage for females.
Unless you are really sick get a life insurance policy and if you want more than 100k, run away if a company tells you no medical to qualify as all goof insurance plaans have medicals