Bank Coverage vs. Private Coverage. What you need to know!
So let's get on to a mortgage insurance discussion. Did I say mortgage insurance? Ah yes! Yes, it's a unique name given to normal, ordinary life insurance, couched under a very nice sounding name - which makes a whole lot of difference to people wary of "life insurance." So, they're not buying life insurance-no, no, they're buying mortgage insurance. I wish there were many more such unique names for good old Life Insurance which would persuade people to buy life insurance and protect their loved ones and their estates.
Apparently, people do not want to talk about death; so life insurance is the last topic for discussion unless you get a close call from the Creator, by way of a heart attack or stroke. Mortgage insurance is not mandatory at your bank, or anywhere for that matter. All you have to do is sign a waiver and you're off to the races. The waiver releases the lending institution of its obligations to offer you a plan that would take care of your family in the event you had a premature death.
Let's get back to the statistics. Out of 1,000 people aged 30, 125 will die prior to the conclusion of a 25 year mortgage. And surprisingly, despite having this fantastic name to this very important plan there are thousands of families lacking protection and leaving their dependent families open to the risk of losing their homes. I am certainly glad that due to the plans aggressively marketed by the banks, many families are protected. Or else, there would be thousands of unprotected families who would end up homeless.
If a mortgage is not paid immediately, in the event of your death, it will become a huge liability to the family.
Choices: Let's visit the choices your family would have to make in such a situation.
By the way, I'm sure you have heard this statement from a friend saying that someone they knew had died and that the surviving family does not have any money. You can immediately conclude that those folks did not have insurance and must have probably snubbed many insurance advisors like me. If one truly loves his or her family, a mere $15.00 a month can prevent such an eventuality.
Before we discuss the nitty-gritty of the plans marketed by the banks and other lending institutions, let's get one thing straight. Would you go to your dentist if you are ill? Or, would you go to your family doctor? True, both are doctors, but their lines of specialty are totally different. Why, then, would a person take advice from a bank official (whose expertise is banking and NOT insurance) to purchase protection of his/her most valuable asset?
Don't get me wrong-bank officers may be extremely knowledgeable in the financial aspects of banking related issues, but insurance issues are far beyond their scope. They are only doing their duty by offering the mortgage plans available.
Therefore, getting advice and signing an extremely important document which can affect your entire family's financial future is something you have to take really seriously. An Insurance Advisor, on the other hand, is qualified to give you better advice on insurance related issues.