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Q. Is it a Wise Choice to Buy Insurance that Would Pay Off my Mortgage if I die Before the Balance is Paid?
For most of us, our home is our largest investment. For most of us it is also our largest Monthly expense. If something happened to the “Chief Breadwinner”, without insurance few Families would be able to afford to keep their home.The loss of a loved one is difficult enough without also having to loose one’s home. So it it understandable want to protect
your family from that threat.
People often ask, “Should I sign up for the plan that is attached to my mortgage?”
As with any contract God is in the Details*.”Mortgage Protection” in reality is just “Declining-Term insurance where instead of your family being the Beneficiary, the bank is paid upon your death.
Each year the amount of money you owe to the bank goes down, at the same time the Value Of the Life Insurance coverage goes down, but the premium stays the same.
I find that most people are better served by buying their own personal insurance plan. As you get older, life insurance becomes more expensive. If you needed to refinance your home, or wanted to replace your house for another some years ahead, you would need to now purchase insurance based on your current age rather the original age.
Many people prefer that their spouse receive the money rather than the bank. That allows your family the flexibility to use the money as needed. Perhaps your spouse can go back to work and make a sufficient amount to cover the families needs, but it might take a year or two to get back to work, or get a business started. Receiving a large “Lump-sum” of money could buy the flexibility to make that happen.