Top	New Message
<- Previous	Next ->

294 hits

Feb 16, 2004 7:10 pm		re: Mortgage Insurance Vs Life Insurance (Term)
Angelo Cerase		Hi Cheryl, I am glad you brought up the point of having your own insurance compared to the bank's mortgage insurance. For the most part, people love their family member more than they love the bank, but still many people insist on having the bank of their beneficiary of their insurance policy. However, as important as having your own life insurance policy (compared to one the bank owns) is, it is even more important now to have your own critical illness insurance policy, since many banks are bundling that with their mortgage insurance. When a person is stricken with a serious illness, many things pop into their mind, but somehow wanting to make sure the mortgage is completely paid off is not at the top of the list. But that is the only thing that a bank's policy can help with. More pressing matters can be anything from getting the fastest care possible (costs money), to taking time off work (long-term disability may not cover the person's leave of abscence) to going on a dream vacation now that they realize life is too short. You are right in saying that a bank's coverage will not cover that. Their own critical illness insurance policy will pay them a large, tax-free, lump sum of money when they need it the most. People who buy a house instead of renting do it to build up an asset. Paying the bank's insurance does nothing to build up an asset for them in the long run, whereas a permanent life insurance policy (and a critical illness insurance policy with a cash value) does. With most term policies, the homeowner has the chance to convert it to a permanent one, that does not expire, without medical evidence. This will help the homeowner build up their assets as well. Too many north americans only have their home as an asset, having a paid-up permanent life policy that they can withdraw money from, tax-free, can only help them out. Think of the paid-up permanent policy like a paid up house, and taking out a loan against it, similar to a reverse mortgage. It can greatly increase a person's retirement income, without having to pay excess taxes. Thanks again for bringing this up! Not enough people know about the disadvantages of the bank's mortgage insurance. Getting your own personal life insurance policy (whether term or permanent) and your own critical illness policy is the best way to go. Angelo Private Reply to Angelo Cerase (new win)

© Ryze Limited. Ryze is a trademark of Ryze Limited.  Terms of Service, including the Privacy Policy