bs-preloader__icon
ru kz en

Mortgage insurance or life insurance: which one is better?

You can gain confidence in yourself and in the future only by fully taking responsibility for your health and life. By choosing a life insurance policy, you can protect yourself and loved ones from any twists of fate. The Calgary Herald article explores pros and cons of mortgage insurance and term life insurance when buying housing.
Mortgage insurance or life insurance: which one is better?

When applying for a mortgage loan, many agree to sign an insurance contract just to get approval from the bank faster and easier. 90% of mortgage loans are concluded for a period of more than 10 years.

Mortgage insurance

When buying a property, you probably expect that you and your loved ones will not be left without a roof over your head even in a difficult life situation. This is exactly what the insurance company can take care of.

In critical circumstances, the insurance company will be able to assume obligations to repay the loan, in part or in full. The borrower's family will not be left on the street and will not receive the burden of debt obligations. Neither bank nor third parties are not to lay claim to real estate.

In case of temporary inability to earn money, the borrower will be able to receive financial support from the insurance company.

The borrower can often count on reduction in interest rates. Thus, the final loan amount with insurance will be slightly higher than the loan amount without insurance but with a higher interest rate. Based on one loan installment, the difference will be even less significant.

If you pay off your mortgage early, the insurance company may refund you part of the premiums paid based on the actual coverage duration. The insurance contract indicates how much money and on what terms you can return.

Term Insurance

The simplest type of life insurance when buying a real estate is term insurance. Such policies imply that the insurer assumes the obligation to pay the beneficiary the insurance sum payable at death of the insured, and the insured assumes the obligation to regularly pay insurance premiums to the company.

The size and frequency of premiums are set by agreement between the parties, for example, in equal monthly amounts throughout the year. The choice of payment method must be determined when entering the insurance contract.

The insurance agreement is usually concluded for one year and contains a condition that allows it to be extended. Since the insured gets one year older and his health condition could change for the worse, the insurer reserves the right to revise certain contract provisions and renew the agreement for the next year on different terms, if both the policyholder and insured agree on that.

Source: https://calgaryherald.com/moneywise-pro/barry-choi-mortgage-insurance-vs-life-insurance-whats-better-for-you

Photos are from open sources.

Share
read also
The secret to a guaranteed retirement income
The secret to a guaranteed retirement income

Defined contribution pension system assumes that each person saves for his pension wh...

The vegetable that protects against dangerous diseases is named
The vegetable that protects against dangerous diseases is named

Scientists found that artichokes could increase life expectancy. According to researc...

Life insurance is not a preparation for death
Life insurance is not a preparation for death

About half of Latvian residents confide in a special poll they take care of their lov...

The most interesting materials of the site you have in the mail! Subscribe to the newsletter.

ASK A QUESTION TO THE EXPERT
ASK A QUESTION TO THE EXPERT
Submit your application