Quote:
Originally Posted by Slava
Mortgage insurance is generally a bad deal. I can explain the full reasons for this, but near the top of the list is the idea that you’re basically insuring the lender as opposed to you and your family. A close second though is that a significant amount of claims are declined by mortgage insurers due to the underwriting at the time of the claim. So in layman’s terms, someone dies and then they decide whether they would have insured them. I know that sounds insane, but that’s how it works.
It’s far better to have your own, stand-alone life insurance policy. The costs are similar in most cases, but the coverage is far stronger and actually goes where you prefer and can be used as your beneficiaries see fit.
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This is the correct answer. Main benefit of life insurance is that it is done on your terms rather than what the bank lays out.
My 2 cents: I purchased a house a while back and got roped into the bank mortgage insurance. I kept paying it for a year into the mortgage. After marriage, I purchased life insurance and called my bank and cancelled the mortgage insurance. The good thing was that it dropped my monthly mortgage payments a bit. I continued paying the old amount with mortgage insurance included with any amounts that would have gone to the insurance, now going towards paying down the mortgage a bit quicker.