Life & Disability Mortgage Insurance

[Hallowed_point]

Sounds like another scam. First mortgage for me so I'd like some input as to whether or not this is worth paying for. I don't pay for credit card protection or any of that bs "insurance" beyond whats mandatory.

Just making sure that I'm on the right track or if it's worth looking into some advice would be much appreciated!

[Skyline_Addict]

Originally posted by Hallowed_point
Sounds like another scam. First mortgage for me so I'd like some input as to whether or not this is worth paying for. I don't pay for credit card protection or any of that bs "insurance" beyond whats mandatory.

Just making sure that I'm on the right track or if it's worth looking into some advice would be much appreciated!

Yeah. Don't get it.

You're better off shopping for an umbrella policy as the insurance you are mentioning only covers the loan specifically.

Life insurance is something to consider if you're joint on the mortgage. Disability is would be something to consider but the premiums can be outrageous. I've seen them as high as $300 a month on a $1600 a month mortgage for people in their late 20s. I can only imagine what it'd be like if you signed up for this in your 40s or later.

[skandalouz_08]

PM'd you some info.

[sabad66]

life insurance is not a bad thing, but i'd suggest getting a separate policy that isn't linked to your mortgage. here's a nice site that will give you quotes:
https://www.term4sale.ca/

look into either term 10 or term 20. Term10 if you think you'll have enough money in the bank in 10 years to not worry about it. Term 20 if not.

[Hallowed_point]

It's just myself on the mortgage and my payment with condo fees etc is quite low ($102 above my current rent actually.) No co signer.

[LilDrunkenSmurf]

Well now I feel like I should remove it from my mortgage...

[Skyline_Addict]

Originally posted by Hallowed_point
It's just myself on the mortgage and my payment with condo fees etc is quite low ($102 above my current rent actually.) No co signer.

Life insurance is typically only important to consider if you are joint on the mortgage, especially spousal.

The only reason you may want life insurance on a sole mortgage is to leave more money to your estate if you pass away.

[Kloubek]

All true responses.

We had the insurance for the first few years of our mortgage, but then switched to life and disability insurance on our person instead.

To start a mortgage, you generally own very little of the home, and it is mainly mortgage. As you pay the mortgage down, the insurance becomes of less and less benefit. Yet, you continue to pay the same amount for the insurance. That doesn't make logical sense.

It is something the banks LOVE to push, but there are better options.

We now just have straight life and disability insurance. As mentioned, even this is only a good idea if you need to support someone in the event of your demise.

[03ozwhip]

I was thinking the same thing. I've never had it on any of my mortgages and thought about it for his one. Unless there is something better, I'm probably going to get extra life insurance instead of the banks insurance, I'm sure it's cheaper too.

[phreezee]

The key is that mortgage insurance of any kind is declining insurance and you are better off getting a policy where the payout doesn't decrease with time.

[revelations]

^ :werd:

All these "insurance" purchases are just another way for the banks to profit. Much better options out there.

[GQBalla]

did not get it, my life insurance through work would have taken care of the mortgage

[Hallowed_point]

If I die I'm sure that someone will feed my siamese fighting fish. No kids, no wife, happy life. I've marked the form "DECLINED" :D

[FraserB]

The only issue is that opting in to the life insurance might be a condition to be eligible for other insurance products for the mortgage. Loss of employment insurance being one of the ones my lender offers, but requires an opt in to the life insurance to qualify.

[CLiVE]

Originally posted by phreezee
The key is that mortgage insurance of any kind is declining insurance and you are better off getting a policy where the payout doesn't decrease with time.

Exactly. Your coverage is decreasing over time as you pay down the mortgage. Get a separate life insurance policy - which I never bothered with until I had dependents.

[Hallowed_point]

Originally posted by FraserB
The only issue is that opting in to the life insurance might be a condition to be eligible for other insurance products for the mortgage. Loss of employment insurance being one of the ones my lender offers, but requires an opt in to the life insurance to qualify. Interesting. I would possibly be interested in employment insurance. Funny how they tie everything in. It's the full meal deal or nothing it seems

[HiTempguy1]

Originally posted by Hallowed_point
If I die I'm sure that someone will feed my siamese fighting fish. No kids, no wife, happy life. I've marked the form "DECLINED" :D

:thumbsup:

As others have said, it may not be a "scam", but it is hardly a worthwhile option for most people. I also declined.

[RealJimmyJames]

Mortgage insurance is a poor value, but getting life and disability and critical illness insurance is probably a smart idea for most people, and doubly so if you have kids.

[sputnik]

Originally posted by LilDrunkenSmurf
Well now I feel like I should remove it from my mortgage...

Yes. You should. You are just wasting your money.

qe61HVGIwUo

[sputnik]

Originally posted by GQBalla
did not get it, my life insurance through work would have taken care of the mortgage

If you are under 50, you are probably overpaying on your work life insurance as well.

[Prail]

Both our jobs have really solid disability and life insurance.

We have a separate .5M joint first to die policy (just to wipe out any and all debt in case the unthinkable should happen for the survivor) and it only costs us $600/yr.

[skandalouz_08]

Just to play devil's advocate and give people something else to think about. For all of those that have the insurance tied to their job, what happens if you lose your job or leave to a company that no longer offers benefits? In Calgary's market it's a reality and if you don't qualify for insurance at that point you may lose your insurance all together. Might be best to have an insurance policy that isn't tied to your job and can continue no matter where you work?

[blairtruck]

i had it on my mortgage and credit line
I hurt my back and was off work for 30 months.
didn't contact the insurance as i was getting a full paycheck from Sun life so i didnt think i would get anything. so just made the payments as normal.

when i was back to work i phoned to cancel as i wasn't getting any use of it.

they said why didn't you tell us. We can back pay everything you missed.

30 months of mortgage payments and credit line payments paid to me in a lump sum.

almost 80k. i payed off credit line and 60k on mortgage.

I have no idea how they worked out there numbers. but i didn't ask any questions as it was more money then they said i would get over the phone.

[Khyron]

If young kids, term life 20 year. 500K - mil depending on what spouse does. Get enough to cover all your liabilities at the worst point.

Decreasing is fine since you need less the older the kids are. At 65 you shouldn't need any life insurance for dependents.

Getting payment insurance for mortgage, credit cards, bank cards, auto loans - it's so overpriced vs 1 policy to cover a lump sum.

I have one of those full life policies partly as a retirement income vehicle but right now I don't think it's worth it over a simple term policy.

[Xtrema]

Originally posted by Khyron
I have one of those full life policies partly as a retirement income vehicle but right now I don't think it's worth it over a simple term policy.

Income vehicle, BS insurance salesman tactic.

1, I have never made a dime in 20 years. With the amount I put in, I would have made double of what the portfolio is worth right now.
2, I have seen 2nd hand the run around you get when you try to withdraw, it's like it's not even your money.

[Redlyne_mr2]

Don't ever rely on insurance through your employer, there are some many exclusions and loop holes. I used to have lif/diss through my mortgage but the premiums remain the same even when you pay down the balance. I now have a separate life/diss policy that I pay monthly. More cost effective and great coverage.

[zhao]

Originally posted by sabad66
life insurance is not a bad thing, but i'd suggest getting a separate policy that isn't linked to your mortgage. here's a nice site that will give you quotes:
https://www.term4sale.ca/

look into either term 10 or term 20. Term10 if you think you'll have enough money in the bank in 10 years to not worry about it. Term 20 if not.

Life insurance is one of those things that some people should have it and some people shouldn't. Telling someone to get term 10 or term 20 is poor advice without knowing their situation.

IMO you should have life insurance if you have people relying on your income; a wife, kids, etc that would be screwed financially if you died. If you just have a spouse odds are good it makes more financial sense to not have life insurance.

Getting life insurance on your dog, your kid, etc is a waste of money statistically, and I wouldn't listen to any CFP who tried to sell you that crap. If you understand the math you're basically banking on 'winning the lottery' hoping that your kid dies early to get to use it; which is a pretty horrible reason to get it imo. And it's akin to getting collision insurance on a car worth $500. Statistically you will pay out far far more than you will ever receive, and if your kid/dog does die, collecting or not collecting really doesn't affect you in any life altering financial way.

Basically insurance of any type is a terrible investment. The statistics on every policy out there have people paying far more into policies than policies pay out, making it a real bad idea..... except when you can not recover from the financial loss. So you insure a car you can't easily replace, and you get liability insurance on a beater because you can shell out $500 easy for a new car, but you can't easily absorb getting sued for $750,000. You insure an income you'd be screwed without, or the life of an income earner you can't survive comfortably without

You do not insure your playstation controller or your pet goldfish, and probably not your spouse if you are without kids.

warranties are just another word for insurance.




Originally posted by Khyron
If young kids, term life 20 year. 500K - mil depending on what spouse does. Get enough to cover all your liabilities at the worst point.

Decreasing is fine since you need less the older the kids are. At 65 you shouldn't need any life insurance for dependents.


This is pretty good advice imo.

[sputnik]

Originally posted by Xtrema
Income vehicle, BS insurance salesman tactic.


:werd:

Those "insurance as an investment" plans are absolutely terrible.

[sputnik]

Originally posted by Redlyne_mr2
Don't ever rely on insurance through your employer, there are some many exclusions and loop holes.

Actually employer based insurance is generally a pretty solid plan that said for someone under 50 it is probably more expensive than a term plan.

Most people are generally overpaying the premiums on an employer plan (based on their age/health) while those who are older and potentially more likely to die are getting a cheaper rate compared to a term plan from a third party.