IS
MORTGAGE INSURANCE A BAD IDEA?
Purchasing a property or getting into a
mortgage agreement could be stressful due to the protocols involved, and banks
have almost made it a tradition to attach mortgage insurance documents
alongside other documents for the purchase or mortgage agreement. However, did
you know that mortgage insurance is not exactly a necessity when one is
involved in such transactions? There are
other alternatives such as straight life insurance and a few others.
Is mortgage agreement a
bad idea?
Although
mortgage agreement is an excellent way of protecting your property, you may
want to reconsider using it as a means of providing safety for such asset after
discovering this. The demerits of mortgage insurance;
•
It can be seen in the
aspect regarding premiums: Here there is no distinction as to health condition,
the standard of living of different individuals to provide discounts as every
person pays the same amount as premium.
•
It is practically
putting you at a disadvantage as in the long run while paying off mortgage
debts, the value of its insurance benefit depreciates thereby making your
efforts almost useless.
•
It puts you through the
stress of having to take out new insurance when purchasing a new property or
engaging in a new mortgage agreement.
•
It is unable to provide
full coverage on such newly acquired property or mortgaged property.
•
Regarding the
beneficiary which is the bank itself: -
here you do not have the opportunity of choosing whom you would like your
recipient to be; In other words, you would not be able to dictate how the money
should be spent, therefore exposing you to less financial security for you and
your loved ones.
•
It is indicated through
the terrible practice of underwriting whereby the bank would make decisions on
whether you are qualified for the
insurance policy or not, and the cost of insurance is based on certain factors
such as age, health and other pre-existing conditions.
•
Also from the
unification of coverage whereby you would not be able to combine all your needs
into one insurance policy as done in ordinary term life policies which saves
money and other expenses arising from multiple insurance policies of each of
those needs.
Insurance, in general, should not be done
in case of an unplanned or shortened end, but also due to the possibility of
specific unanticipated events which could occur in the long run such as
diseases, illnesses, and disabilities. For you to be able to make the right
choices, and choose the right insurance policies, it is advisable to contact an
insurance agent who would provide a guide as to what is best for you in such
circumstances. Now to the question, is
mortgage insurance a bad idea? It is left for you to answer.
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