While “Bank” mortgage insurance …. might be …better than no insurance, it has serious limitations when compared to a personalized insurance plan from a licensed insurance professional. The following chart outlines many of these differences:
|Mortgage Insurance from Banks, Trust Companies or Credit Unions||A Personal Insurance from Ken MacCoy, CHS|
|You are insured under a group policy issued by an insurance company.||You are insured under an individual policy issued by an insurance company.|
|Your policy is subject to change by the insurance provider. The premiums can change as per the terms of the policy.||The insurance company cannot change the policy provisions or the guaranteed policy premiums.|
|Your mortgage lender owns the certificate of insurance.||You own your own personal life-mortgage insurance policy.|
|Your mortgage lender is the beneficiary.||You name the beneficiary of your choice.|
|The amount of insurance protection reduces as you make (pay-down) your mortgage payments.||The amount of insurance protection remains level and will never decrease; unless you specifically request a reduction.|
|The coverage decreases; the premium does not. In fact, when your mortgage renews the premium usually increases.||If you reduce your coverage, your payments will be reduced as well.|
|Coverage terminates when: you sell the property, pay off the mortgage, increase your loan, switch lenders, default on the mortgage or the group policy terminates.||Coverage stays in place and can be renewed to age 75, (age 85 to 100 with some companies), it is not affected when you change homes or lenders.|
|The insurance protection stops when the property is sold.||The insurance protection can stay in place (if required) even if the property is sold.|
|You are not the policy owner (the bank is), so no changes are permitted under the plan; under any circumstances.||You own the policy and can change the amount of coverage, beneficiary and/or convert to a permanent insurance plan.|
|Insurance coverage is not guaranteed renewable for a new mortgage. If you change financial institutions, you must provide new evidence of insurability.||Insurance coverage is guaranteed renewable to age 75 (age 85 with some companies) and you can keep it this long if you wish.|
|The banker is not usually a license insurance agent. They can usually only provide you with one (1) quotation.||Ken is a licensed insurance broker and Certified Health Insurance Specialist with 30+ years insurance experience representing 16 insurance providers.|
As you can see there is a big difference in the two forms of coverage…. Individual insurance is far more flexible plus includes level coverage & level premiums plus built in guarantees; while bank mortgage insurance provides decreasing coverage at increasing premiums. The reality is we can usually offer individual term insurance at double the coverage for up to 50% savings off your existing mortgage insurance premium.
Once you have decided to consider individual insurance, we recommend take a close look at Term 20 as opposed to Term 10, as the total accumulated premium outlay over 20 years will actually be lower than a 10 year term policy. Why? While the Term 10 premium is initially lower, the premium increases significantly in the 11th year.
For a No Obligation quote, please call or e-mail the following information to firstname.lastname@example.org : Full Name and Date of Birth for You and your Spouse; if applicable. Also, please advise if you have used any tobacco products (and type, including marijuana) in the past 12 months; plus the balance owing on your mortgage.