Quote:
Originally Posted by onetwo_threefour
All true, but equally important, IMO, is that with life insurance you designate your beneficiaries, while with mortgage insurance the lender is the designated beneficiary. Being able to choose your beneficiary gives your estate many more options of what to do with an insurance payout which can be hugely beneficial with respect to estate and tax planning.
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I would say that not only is this applicable (and the other points made by Shazam), but there are other reasons:
1. If you want to move your mortgage from one lender to another at the end of the term you don't have to requalify for coverage.
2. If you die and your wife is still alive she doesn't lose her coverage (at least if you each buy a policy as opposed to the joint-first-to-die coverage that mortgage insurance generally is). I know some people will say she doesn't have the debt anymore, which is true. If you have kids though and dad dies, mom probably still wants to keep a policy around so that the kids have some money in the event that she dies later on.
3. Similarly to #1 your rates are locked in for longer than the term of your mortgage. By not having to re-apply every five years (or however long your term is) you have a set rate for the longer term which undoubtedly saves you money.
These are certainly not the most important reasons, but they are things to consider that just further stacks the case for not buying mortgage coverage if you can.