On today’s episode of Fiduciary Friday, Joe discusses Mortgage Insurance Vs Life Insurance. Who needs these Insurances? In Joe’s opinion, everybody who owns a home. But what type of insurance is best? Watch this video as Joe explains the differences between them, so you can make an informed choice that best suits your needs.
Mortgage Insurance Vs Life Insurance – Is it Even Needed?
When purchasing a home it is important to obtain life or mortgage insurance . The purpose of this, is so your family are protected in the unfortunate event that you pass away. Should you pass away before you have paid off your home, your beneficiary will receive, from the insurance company, an amount to pay off your mortgage. This is put into place to alleviate the burden in which people find themselves after losing a loved one. Maybe you need some personal advice on which insurance is better suited for you. Message Joe here and he will be happy to give you some insight.
What Is Life Insurance?
Life insurance is a type of insurance you can purchase through your Insurance Broker. In the event that you pass before your home is paid for, your policy will be awarded to your beneficiary. An insurance policy can be taken out in a lump sum, and the policy holder determines the amount of coverage. Should you pass, the lump sum is payable to your beneficiary regardless of the balance of your mortgage. Life insurance is attached to the owner of the policy. Life insurance is also typically cheaper than mortgage insurance, but a medical questionnaire or physical may be required. Lastly, based on your policy, life insurance may provide different types of coverage that mortgage insurance may not.
What Is Mortgage Insurance?
Purchased through either a Mortgage Broker or bank, it is also an amount payable to your beneficiary in the event of your death. However, it is purchased for the value of your home and decreases as you pay off your mortgage. When you take out mortgage insurance, your payments remain the same throughout the time you have the debt, yet your payout decreases as you pay it off. Therefore, you pay more and get less. Mortgage insurance is attached to the mortgage of the property. Should you move, a new insurance policy should be put in place on the new mortgage. Looking to sell your house? Check out Joe’s selling tips here.
Which is Better?
While there my be some debate on which is better, Mortgage Insurance Vs Life Insurance, Joe’s opinion is that Life Insurance is the best option. Life insurance offers much more value for your money if you are in good health. Ultimately, you have to decide which best suits your family. Any insurance is better than no insurance at all.
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