The concept of buying Mortgage Insurance is tempting. And the thought of having your mortgage paid off if something happens to you is very comforting.
But all mortgage insurance isn’t the same. There are two kinds, and they offer very different coverage.
The first type is called Private Mortgage Insurance (PMI). If you buy a home with less than 20% down, your lender probably demands you have it. PMI protects the lender, not you. Let’s say you default on your home loan. Your PMI will reimburse the lender if he’s not able to re-sell your home for the amount of our mortgage.
PMI is expensive. So as soon as you have paid down your mortgage to a point where PMI is on longer required (your lender is supposed to advise you when this happens) it is wise to cancel it.
Which leads us to the second kind of Mortgage insurance: Mortgage Life Insurance. Here, in effect you buy an insurance policy that will pay off your mortgage in the event of your death, disability or some incapacitating disease.
Unlike PMI, this insurance is voluntary. And, while it’s better than PMI, most experts don’t recommend it for two big reasons:
1. Mortgage Life Insurance is generally sold by the mortgage company. You don’t get the opportunity to shop competitively for your best rates.
2. Mortgage Life Insurance has a fixed premium (generally expensive) but your benefits decline as you pay off your mortgage.
Most financial experts feel it doesn’t make sense to buy life insurance for narrow reasons. It’s much better to analyze your overall needs — how much would it take for your spouse and children to maintain their standard of living — if something happened to you? Then take out a Life Insurance policy that covers all your financial needs including your home mortgage.
Fortunately, Term Life Insurance rates are extremely reasonable today. An easy way to find out what your needs and costs could be is to contact an independent sales agency like selectquote.com with experienced, impartial licensed agents. They’ll not only help you determine your needs, they’ll “comparison shop” highly rated companies for your best rates.
SelectQuote has exclusive videos of Suze Orman offering impartial advice on buying Life Insurance.
Wednesday, November 14, 2007
Tuesday, November 13, 2007
Life Insurance can increase spendable income.
It sounds crazy but it’s true. Just consider this: if something happened to you, where would the money come from for your family to pay the rent or mortgage? Their food and clothing? The car payment? Gasoline? Health insurance? Schooling? Etc., etc.
Chances are if you tried to carve out of each paycheck enough savings to quickly build up the nest egg required to cover those costs, you’d scarcely have anything left to live on.
That’s the glory of Life Insurance — especially Term Life Insurance. Term Life Insurance provides pure protection. There aren’t a lot of bells and whistles. But it does allow you to give your family hundreds of thousands of dollars in protection for just pennies on the dollar.
Let’s say you and your spouse are in your mid 40’s. You’re in reasonably good health, your family health histories are good and you don’t hold down dangerous jobs. Chances are you could each get at least a $250,000 Term Life policies for as little as a dollar or two each a day. (The wife’s policy will cost less, because statistically women live longer than men.)
That leaves a lot of money left over for piano lessons and camping trips.
An easy, no obligation way to see how affordable Term Life Insurance can be for you is to contact an independent sales agency like selectquote.com with experienced, impartial licensed agents. They’ll not only help you determine your needs, they can “comparison shop” highly rated companies for your best rates.
SelectQuote has exclusive videos of Suze Orman offering impartial advice on buying Life Insurance.
Chances are if you tried to carve out of each paycheck enough savings to quickly build up the nest egg required to cover those costs, you’d scarcely have anything left to live on.
That’s the glory of Life Insurance — especially Term Life Insurance. Term Life Insurance provides pure protection. There aren’t a lot of bells and whistles. But it does allow you to give your family hundreds of thousands of dollars in protection for just pennies on the dollar.
Let’s say you and your spouse are in your mid 40’s. You’re in reasonably good health, your family health histories are good and you don’t hold down dangerous jobs. Chances are you could each get at least a $250,000 Term Life policies for as little as a dollar or two each a day. (The wife’s policy will cost less, because statistically women live longer than men.)
That leaves a lot of money left over for piano lessons and camping trips.
An easy, no obligation way to see how affordable Term Life Insurance can be for you is to contact an independent sales agency like selectquote.com with experienced, impartial licensed agents. They’ll not only help you determine your needs, they can “comparison shop” highly rated companies for your best rates.
SelectQuote has exclusive videos of Suze Orman offering impartial advice on buying Life Insurance.
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