Mortgage Life & Disability Insurance????

[msouther]

Hey Folks,

I want some advice as to whether or not the general public on here chooses to go with this through their lender, or declines?

I have 1 mortage for my principal residence which we chose to go with this on. For my investment property I am considering whether or not to do so.

Insurance is just that, just in case something happens. Chances are if you are healthy (like we are) you will never need it and it is a waste. I guess it is piece of mind, but I am contemplating whether or not to get it and then if the answer is not, cancelling it on my other mortgage to save some money.

Thanks for any opinions etc.

[el-nino]

I personally think that you should get it. Not through the bank or a mortgage Broker but go through a financial planner. Thats my personal opinion and I am a mortgage broker.

[sputnik]

Get a good life insurance policy instead.

The disability insurance usually only covers cancer, stroke and heart attacks.

If the property is for rental why do you car about insurance when your tenants will be paying the mortgage for you?

[Godfuader]

No disability on rental properties.

[Masked Bandit]

Like others have said, buy a decent life policy outside of any mortgage / loan set up. It's a long explanation as to why but a decent life agent should be able to explain it to you.

When the wife and I bought our first property I was just going to get the stuff through the mortgage broker but I was lucky enough to have a life agent in our office that I could hassle for information (his office was next to mine). In the end, it should be a damn crime to even sell mortgage life insurance.

I have the name and number of a decent life / disability guy if you are interested.

[msouther]

"If the property is for rental why do you car about insurance when your tenants will be paying the mortgage for you?"

Hey sputnik, thanks for pointing that out as it makes the decision real easy regardless unless something happened to myself and my spouse god forbid.


"In the end, it should be a damn crime to even sell mortgage life insurance."

LOL. That is funny. I think the reason I had hesitations about it to begin with, should've been the decisive factor. I think if you go with your instincts on things, then generally your outcome will be more favourable than if you go against.

Thanks folks and for the record, the bank guy is coming over and I am not getting either. I already have a good life/disability policy for my wife and I through my work. I have life on my primary mortgage, but it is only $10 bi-weekly so for now I will keep that.

The policy on the rental property would've been about $67 a month for the both of us. That is quite a decent chunk of change and it means I will have more room so that I can be more flexible to the renters!

[el-nino]

To me it would be worth getting insurance for a rental. If something were to happen to you would you want your wife to worry about paying that mortgage? What if the renters bail? what if she cant find a new renter? It may be a good thing to do in my opinion.

[Masked Bandit]

Originally posted by msouther
[B
"In the end, it should be a damn crime to even sell mortgage life insurance."



Thanks folks and for the record, the bank guy is coming over and I am not getting either. I already have a good life/disability policy for my wife and I through my work. I have life on my primary mortgage, but it is only $10 bi-weekly so for now I will keep that.

[/B]

Actually, you shouldn't bank on a policy provided through work (not that there will be anything wrong with the policy itself). Here is the scenario.

Let's say at this point, you are young and healthy so your premiums for regular term life insurance would be dirt cheap. But you don't bother because you have coverage through work. Maybe four years from now, you develop....say.....Diabetes. A year after that you decide you want to go work for someone else (better pay maybe) but they don't have group life insurance. Go try to buy the life insurance now that you have developed Diabetes....20 times the price it would have been before.

Buy it now while you are young and healthy.

[GingeRRRBeef]

alright since I'm a complete n00b to this can someone please explain what's the difference between mortgage life & disablility insurance and the conventional life insurance? and why I should get one or the other? PLZ & TY

[canuckcarguy]

If you get life insurance on a mortgage, make sure it's portable - if you get it through the bank, you usually can't move it to another lender, which means that at renewal time, you'll have trouble negotiating rate.

I'd talk to a financial planner and get some competitive quotes on a policy to cover all of your needs at once.

Conventional life insurance is just that - an insurance policy on your life. Mortgage life insurance is a policy that covers the outstanding balance on your loan. sometimes it can be cheaper, at least at the outset, because it's a declining benefit.

[core_upt]

Thought's I'd give this a bump as I am facing this decision too, but on my primary residence.

To Silver_SpecV:
AFAIK, mortgage insurance covers mortgage only, is set with your initial mortgage and renewed with it as well. What you pay at the beginning doesn't change as you get older, however your 'payout' will as your mortgage decreases over time. i.e. you pay $60 a month, every month you have a mortgage (say 25, or 40 years) and the 'payout' is the balance of your mortgage (say 500,000 at the beginning, but only $325,000 after 10 years, and only 50,000 after 22 years, or whatever, hence why it is a declining benefit). To 'maximize the benefit' you'd need to die early!! hahaha

Life insurance is coverage on your life. There are multiple options for length of the term (which will set the rate for 10/20/40 years) but the pay out is the same throughout the whole time. If you have a $500,000 policy and you die tomorrow, the pay out is $500,000; if you die in 40 years, the payout is $500,000.

My questions:

So, I called a broker and got quotes on a few options, varying by term and such. I then priced similar policies online and got quotes varying from $20/month to $55/month. That's a pretty big spread, but I'm wondering if this is a commodity product (is all service basically the same) or are there companies that are better or worse to go with? This may be more important now in the wake of major investment banks collapsing in the US!

Thoughts?

[Masked Bandit]

Originally posted by core_upt
Thought's I'd give this a bump as I am facing this decision too, but on my primary residence.

To Silver_SpecV:
AFAIK, mortgage insurance covers mortgage only, is set with your initial mortgage and renewed with it as well. What you pay at the beginning doesn't change as you get older, however your 'payout' will as your mortgage decreases over time. i.e. you pay $60 a month, every month you have a mortgage (say 25, or 40 years) and the 'payout' is the balance of your mortgage (say 500,000 at the beginning, but only $325,000 after 10 years, and only 50,000 after 22 years, or whatever, hence why it is a declining benefit). To 'maximize the benefit' you'd need to die early!! hahaha

Life insurance is coverage on your life. There are multiple options for length of the term (which will set the rate for 10/20/40 years) but the pay out is the same throughout the whole time. If you have a $500,000 policy and you die tomorrow, the pay out is $500,000; if you die in 40 years, the payout is $500,000.

My questions:

So, I called a broker and got quotes on a few options, varying by term and such. I then priced similar policies online and got quotes varying from $20/month to $55/month. That's a pretty big spread, but I'm wondering if this is a commodity product (is all service basically the same) or are there companies that are better or worse to go with? This may be more important now in the wake of major investment banks collapsing in the US!

Thoughts?

Your explanation is bang on. That's why I think it shouldn't even be an option.

I wouldn't worry about which company per se you are buying the policy from, I would just make sure it was a local broker. In the end, all policies are pretty much the same and the key is having a broker that can make sure you are buying the RIGHT policy.