As we all know, buying a home is one of the most important investment decisions you will ever make. You’ve found your dream home and have bought home insurance to cover your property and legal liability. So now, all you have left to do is unpack your boxes and settle in.
Mortgage Insurance enables you to pay back all or a portion of your financial obligations in the event of death. This will ensure your investment is protected against life’s little surprises. Thus, you can focus on your family without worrying about money.
These days, you can buy mortgage insurance from a bank when signing your mortgage or you can buy it from a financial institution. To help you decide, here are the advantages of buying your mortgage insurance from a financial institution:
When you buy mortgage insurance from your bank, the bank owns the contract and is the beneficiary. If you buy your mortgage insurance from an insurance company, you own the contract and can name any beneficiary you want. Your beneficiary can choose to repay the loan, pay his or her debts or use the benefit for something else.
Your premium is fixed and guaranteed. The amount of mortgage insurance coverage you buy from an insurance company will remain the same for the duration of the loan. At a bank, the amount of your mortgage insurance coverage will decrease as the balance of your mortgage decreases while your premium will remain the same.
You can convert your mortgage insurance. An insurance company will allow you to convert your mortgage insurance to permanent life insurance, as needed, throughout the term of your loan. If you do convert your insurance, your premium will increase but you do not have to undergo a medical exam. The policy will remain in force until your death.