Mortgage insurance – lender’s or personal?
When considering what type of insurance coverage to choose when protecting your home, many do not take the time to consider further options than proposed by their lending institution. Found the right home, and the right mortgage? There are two ways to insure your mortgage; Lender’s mortgage insurance, and personal insurance. A personal life insurance policy available through Specialty Wealth & Financial doesn’t just insure your home, it insures you.
What happens as the mortgage decreases?
Generally, most insurance provided by the lender is non-convertible term insurance that decreases as the amount of the mortgage decreases covering only the outstanding amount of the mortgage. If, however, you chose personal life insurance that covered the home, your insurance doesn’t decrease. This means, when your family needs it most, additional funds could be available above and beyond the value of the mortgage.
Mortgage Insurance coverage over time
Why consider personal insurance? Selecting the plan that meets your financial security goals, with products that are fully convertible to any permanent plan, can become part of your full financial security plan for your family’s future.
If medical issues arise, if your health deteriorates, or you take up a hazardous job or hobby, you can keep the full death benefit you already have and have the option to convert your insurance to permanent insurance without re-qualifying.
When using your lender’s insurance, the lender owns the policy, and their restrictions may leave you with few options. With personal insurance, you own the policy, and can customize it when your needs change. You can decide how to adapt the plan to your needs, with premiums to suit your budget.
What happens if we decide to move or change lenders?
If you decide to move, or refinance with a new lender, you can’t take your lender’s insurance with you. You may have to now re-qualify for new insurance, at a higher premium, as health changes may influence rates, and will be based on the new age you are at the time. With personal insurance, you can switch lenders without jeopardizing insurance coverage.
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