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.
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