Your home is probably the biggest investment you’ll ever make. When arranging a mortgage, your mortgagor may offer you mortgage insurance. Have you considered the advantages of personal life insurance to cover your mortgage? Consider the differences:
Most companies offer decreasing insurance. Even though the death benefit is decreasing, the cost remains level. The coverage expires without allowing you the opportunity to purchase other insurance or provide you with cash values.
The proceeds are payable to the mortgage Company. In the event of death, the mortgage is automatically repaid.
In most cases, if you take your mortgage to another company, you lose your protection. To obtain mortgage insurance with the new company you must submit new satisfactory evidence of health and are subject to the current charged by the new mortgagor.
The face amount can only be the exact amount of your mortgage (no more, no less).
Individual Life Insurance
You can choose term or permanent coverage. A term policy may be converted, regardless of health, until age 65. At some point in the future, the cash value of a permanent policy may be sufficient to pay off the balance of the mortgage.
You appoint a beneficiary who can use the proceeds in whatever manner he/she wishes (i.e., to invest rather than pay off a low interest mortgage).
Your policy is portable. If you transfer your Mortgage to another company, your insurance remains in force – no need to re-apply and prove your insurability. You are protected from the danger of losing your insurance because of a change in your health.
You may select an insurance amount sufficient to cover your mortgage and other outstanding debts.
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