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Mortgage & Life Insurance

October 6, 2010 - Filed Under Insurance, Life -

When you get a mortgage, you are required to have life insurance to cover the mortgage in case something happens to you. What they don’t tell you is that you will keep paying the same monthly premium (in my case $33 a month) for the full term of the mortgage. So as an example lets say your mortgage is $100k and you pay $33 a month in life insurance. 15 years down the road when the balance of your mortgage is around $50k, you’re still paying $33 a month!

You’re much better off at some point to get separate insurance, you don’t have to take the banks insurance as long as you are covered. So try for some personal life insurance no exam required on “low” amounts, typically, and you’ll either be saving on lower premiums as the balance goes down, or your family will get the balance after the bank is paid. $100k policy, remaining mortgage is only $50k, family gets $50k to keep. It makes perfect sense!

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