Wednesday, September 18, 2013

Mortgage Payoff Insurance vs. Stand Alone Life Insurance 

Which option is best for you?

By: Edward L. Blais, JD, CIC
With valuable contributions by Hannah Wojcik of Brewster & Shuster

At Blais Insurance, we are often asked by customers to help make sense of the many options that are available to protect their loved ones in the future. One of the most common questions is:

Should I buy the mortgage payoff insurance offered with the mortgage? Or, is a stand alone, personal life insurance policy, which can fund a mortgage payoff in the event of my demise, a better option?

While both options may appear to offer similar benefits, there are many ways in which they differ. To see which choice might be best for you, please consider the following:

A typical bank mortgage insurance policy:
  • Is a group policy, therefore you may not receive the most competitive rate
  • Is equal to the outstanding mortgage amount and decreases over time
  • Pays the money directly to the bank, which acts as the beneficiary
  • Can be cancelled by the bank
  • May not list you as the owner of the policy

A typical life insurance policy:
  • Can only be cancelled by you
  • Can be converted to a permanent plan
  • Pays the money out to whomever you designate as a beneficiary
  • Lets you shop for the most competitive plan and price
  • Allows you to choose the amount of coverage and duration of the policy
  • Lists you as the owner

We would be happy to sit down with you to review your options and design a plan customized to your specific needs and budget.  To schedule a complimentary consultation today, please call Blais Insurance at 725.0070.