Is Your Mortgage Insurance Plan Good?

Mortgage insurance which is used to pay off a mortgage is something that you will be asked to out by the bank. It is necessary if, in case, something should happen to you or your spouse. Your loan will get paid off, which is beneficial to both your family and to the bank. When banks offer you mortgage insurance through a group plan, they act as though they are doing you a favor. However, are they really?

The truth is that mortgage insurance is probably a better deal from most insurance companies. Mortgage insurance is basically term life insurance. Just like term life insurance, your policy will last for a certain amount of time. It will pay to you or your spouse if you are both insured. The only things that are different about it include how much money you will pay for it and how much control you have over it.

Mortgage insurance that is provided to you by the bank will not allow you to customize a plan which is suitable to your needs. You will also be put with other borrowers under a group plan which means that you will not have much control of your policy.

However, through a company that you decide to choose like Canada Life or National Life, you will be able to choose who your beneficiary is and how much you will spend on the proceeds. Through lending institutions that a mortgage is taken from, these options are not available for you. If the person who is insured should die, the mortgage loan is completely paid off.

The bank also has the ability to not renew your policy and cancel it when you decide to sell the house, making you uninsured.

Your mortgage insurance will also cost more when it is taken from a bank. Rather than giving you fixed-rate insurance, the bank can increase your premiums throughout the term of the policy. You might also pay as much as forty percent more from your bank than the amount you would pay from an insurance provider. The policy you choose from a bank can decrease in face value. A policy from an insurance provider will have the same face value throughout the entire period of the policy.

Although many people would prefer to pay more money on their mortgage insurance if it means that they do not need to deal with insurance agents, you can find a policy which is suitable to your needs that is also affordable through the internet. Organizes like the Hughes Trustco Group can find quotes for you from a variety of providers so that you will know what ones have the best deals possible to offer you.

While mortgage insurance is very important, it does not mean that you have to pay more or allow the bank to control decision for you. Instead, it is a better idea to find your own policy through a company that you choose.

Posted in: Is Your Mortgage Insurance Plan Good?