When purchasing a home, there are a lot of expenses come together with your mortgage, including legal fees, costs associated with moving, and purchases for a new home. At the moment, your budget can be tight, so you will need to cut off other expenses as much as possible to be able to maintain your current lifestyle. However, you also need to pay off your mortgage in case of your death with the initial lowest cost. The best solution you can refer to is Term insurance. Here are some benefits of Term life insurance so you can take into consideration of choosing it over mortgage insurance:
- Control. When you buy term life insurance, the beneficiaries will be your family, your dependents or whoever you choose. On the other hand, the only beneficiary of your mortgage insurance is your lender.
- Flexibility. Term life insurance is a long term value for you. For your future needs, you can always convert the term life insurance policy into permanent life insurance policy or extend the policy to longer period without providing medical evidence.
- Coverage. It depends on your needs to choose coverage up to $1,000,000. Your family can either pay off the mortgage, debts, or replace for the income and expenses. Unfortunately, with mortgage insurance, as time goes by, you are paying down your mortgage, but the cost of your insurance is still the same. At the end of the day, you only pay off the mortgage upon your death.
- Guaranteed death benefit and premiums. Your death benefit will be guaranteed for the life of the policy, and also your premiums will be locked. On contrast, each time you renew your mortgage or switch lender, you have to renew your mortgage insurance policy. As you are getting older, your health won’t be as good, and then your premium rates can rise higher every time you renew your insurance policy.
- Portability. When you switch the lender, you will need to reapply for your mortgage insurance as well. With term life insurance, it will remain with you in effect no matter which lender you choose.