Mortgage Life Insurance: How To Choose One?
More often than not, owning a house of our own is a dream for most of us. The pursuit of achieving this dream is an expensive one though. When we go for a home loan, the monthly instalments end up taking a big slice of our monthly income. In the event of you or your spouse's early death, the sudden loss of income can very well leave your survivors in a difficult situation unable to make payments. To your family and loved ones protected from such a financial hardship, you should consider going for a Pick-a-Term Mortgage Protection insurance.
Pick-a-Term Mortgage Protection has a decreasing death benefit that matches your mortgage balance at the beginning of each year. Since the death benefit decreases along with your mortgage balance, the cost of Pick-a-Term is less expensive in comparison to a non decreasing term life insurance policy.
Quite often when you go for a home loan or mortgage, the bank, along with the loan will usually sell you mortgage insurance. This is actually not mortgage insurance but a life insurance policy where it protects itself by having you pay for a policy the beneficiary of which is the bank itself. You end up paying for an expensive policy which is owned by the bank and in which the bank is the sole beneficiary. Another catch in such a policy is that although the amount of the policy decreases overtime, the premium remains the same. In reality, the bank should decrease the premium over the coverage period but usually they don't. Thus you end up having an expensive policy that doesn't decrease overtime; the bank owns it, controls it and will benefit from it. So if you want to take control your financial life, get a Pick-a-Term Mortgage Protection policy.