Your home is one of the most important purchases you’ll make and protecting it is crucial. Mortgage protection plans offered by your lender are policies that insure your mortgage against the death of the title holder and pays the outstanding balance to the lender to cover the lenders potential loss. When you need protection and security after a death, the lender seem more concerned about their bottom line than your families well-being.
The problem with the lenders (bank, credit union) plans is that you, the homeowner, do not own the actual Insurance Policy. Mortgage insurance from your lender is held by the lender and only paid out to lender, and not to your family, which leaves loved ones with little to no income replacement and no financial security.
An Individual Life Insurance Policy can be up to 40% less than the lenders offerings (depending on age and health) because the lender are the go between to the insurance company. The increased cost is added to the price of the insurance to cover the non licensed brokers fees. So not only is it costly to insure through the lender the actual coverage is not benefiting those who matter most. Individual mortgage insurance keeps your home in your family’s hands and protects the families interests, because your family deserves Financial Security upon death – not your lender. For a comparison of Individual plans versus lender plans and understanding the value of individual mortgage insurance policies versus your lender’s policies, means looking at what each policy can offer you. Please see the table below to see why a lender’s mortgage insurance plan doesn’t offer the freedom and security of insuring yourself individually.
Contact Henley Financial & Wealth Management if you have any questions or need help insuring your home for your families financial security. We are happy to help save you money while creating a positive financial future.
If you are in need of a mortgage please contact Bayfield Mortgage Professionals a trusted professional and mortgage broker.
Individual Plans Versus Your Lender
|Questions?||Individual Insurance Policies||Mortgage Loan Insurance from your Lender|
|Do I own my insurance policy?||Yes||No, The owner is your lender.|
|Who can be the beneficiary of the policy?||Anyone you choose.||Only the lender can receive the benefits from the policy.|
|When does coverage end?||It depends on the term that YOU choose.||Coverage ends when the mortgage is paid.|
|Do I have the same coverage for the life of the policy?||Your coverage stays the same throughout the term of the policy.||The coverage decreases relative to the value of the remaining loan.|
|What can your coverage be used for?||Any purpose. The benefits are paid as a sum to your beneficiary to be used how they wish.||The coverage may only be used to cover the balance on the loan.|
|Can I get lower rates if I’m a non-smoker/in excellent health?||Yes. You usually pay as much as 50% less on your insurance premiums.||No, premiums are determined under one rate system.|
|If I sell my home am I still protected?||Yes. Since you are the owner of the policy.||No, you will need to obtain a new policy.|
|Can I convert or renew my policy to change the terms or coverage?||Some policies may be renewed or converted to another policy.||No, you may not convert nor renew coverage. You may not transfer this coverage into a new policy.|