OK – so you’ve bought your dream home! But truth is, you co-own the home with the bank that holds your mortgage. One of the items the bank will request of you is to purchase mortgage insurance – which in theory sounds great. If the unfortunate happens and you pass away, this insurance will pay off your mortgage and your family will own your home. Here’s the catch: It’s a very limited policy for a number of reasons:
- It only covers you for your outstanding mortgage– so your coverage is getting smaller by the day as you pay down the mortgage.
- The insurance lacks some of the beneficial features that come with policies purchased from insurance companies (the ability to convert to permanent insurance, switch to longer terms)
- IT’S MORE EXPENSIVE! Typically 3 times more expensive than with insurance companies
If you have or will be taking a mortgage, best to meet and discuss the best options for protecting your investment!