Creditors Mortgage Insurance vs. WHAT I OFFER

By
Services for Real Estate Pros with OneAmerica - Seminole, FL

There are many ways to purchase mortgage protection insurance. One way is through your lender if they offer it. Another way is through the many solicitations that you will undoubtlly receive in the mail, very soon after your home closing. The best way to purchase mortgage protection insurance is by contacting a professional who will explain to you the differences in the types of coverage. Here, I will try to cover some of what I believe are the important aspects of mortgage protection insurance.

When purchasing mortgage protection coverage you will pay a monthly premium to cover your outstanding mortgage balance, (in most cases; purchase can be done on an annually basis as well). When purchasing through your Lender or a soliciation, they will be the owner, the beneficiary and control what happens to your coverage. Dealing with someone like myself, you control what happens to your coverage. You chose the  beneficiary.  Most cases, lenders offer a decreasing term type policy, I offer a fixed, level term for up to 30 years,(based upon your age).

What does this mean to you? With a decreasing term policy, you will be paying the same amount month after month, while your mortgage balance decreases with each payment you make. Should something happen to you, they pay off your mortgage balance. With the type of policy I offer, your beneficiary pays off the mortgage and keeps whatever the difference is. The cost for these two policies are very close to each other, with pennies being the difference between cost.

In most cases, purchasing coverage through your lender, you may be cancelled by the insuring company, and often coverage runs out when the mortgage is paid off. I offer no link to a lender, therefore if you sell your home, pay off the mortgage early, or whatever the reason, your coverage continues, (except in the case of non-payment). There policy is not transferable should you move to another home. My product is fully portable. You can use it to cover another mortgage. My policy can also be converted to a permanent type policy, without additional proof of insurability, there is not.

I also offer cash value life insurance that can be utilized to pay down the mortgage balance in the future.

I hope that this helps you to understand mortgage protection insurance coverage. Remember, use a professional, like myself.  

   

Comments (1)

Donald Apelian "Short Sale Specialist"
Meridian Financial / First American Financial - Saint Petersburg, FL

Tony - I know that the "credit life" policies that used to proliferate our industry were very pricey, beside just being a plain bad deal for the home owner. I don't even know of any lenders or insurance companies offering this product anymore, but I do believe it's important for the home owner(s) to protect the mortgage with some coverage.

Is there a plan that would also cover the mortgage or monthly payments in the event of a disability? If so, would this be a rider to the life policy, or separate coverage? 

Sep 05, 2008 05:53 AM