What is the difference between term insurance and mortgage insurance?
Possibly most people today are aware of the great difference between term life insurance and bank mortgage insurance. People know that the bank owns the insurance (you don't) you have to pay for it (they don't) they are the beneficiary (your heirs are not) and it goes on and on.
Term Life Insurance
But apart from those good reasons, remember also that most bank mortgage life insurance is a lot more expensive. But it is not only more costly in dollars, it is also a lot more expensive in human anguish.
Term Life Insurance Comparison
Take your own situation or the situation of a friend that fits this scenario. Married with children, one spouse dies suddenly. The family has the normal comittments of daily living expenses all of which continue.
But what does the bank do, if you have bought their plan and not term life insurance? They pay off the mortgage but leave no money for the family's every day needs!
If this couple had bought term life insurance, the survivor would have the money to continue to pay the mortgage as well as being able to look after the family.
Term Life Insurance Continues
Again, assume there had been a term life insurance policy and the mortgage had been obtained at favorable rates. Compared to today, it would have been very financially advantageous NOT to pay off the mortgage. Because now, if the survivor needs to take out another mortgage to continue the same standard of living, interest rates are higher along with the monthly payments.
Disability Insurance Why Do People Buy It?
Each person who buys disability insurance has his or her own particular reason to get income protection with their own disability insurance policy.Disability Insurance How Much Is Enough
Determing how much insurance you need depends on how well you want to live if you need to make a claim and on how much coverage you are able to purchase.Mortgage Insurance For Your Home
When buying a home, most of us will take out a mortgage to finance our new purchase. The provider of that mortgage, normally a bank or trust company, may require you take out a mortgage insurance policy to guarantee payment of the mortgage.