Anyone buy mortgage life insurance?

Discussion in 'Community Discussion' started by HE15MAN, Jun 23, 2011.

  1. HE15MAN macrumors 6502a

    HE15MAN

    Joined:
    Sep 3, 2009
    Location:
    Florida's Treasure Coast
    #1
    That pays off your loan if you die? Good or bad idea? I have gotten 20 letters in the mail trying to get me to buy it, and know someone whose father died and the 125k left on the loan was paid off in full due to him having it. Is it something I should get through my lender (Wells Fargo) or a third party if I decide to do it?
     
  2. Rodimus Prime macrumors G4

    Rodimus Prime

    Joined:
    Oct 9, 2006
    #2
    I have read that it is a huge rip off. It is better to buy term life insurance of the same value or add it to your current one. Unless you have some major health issues it would be less than 1/2 the cost of mortgage life insurance.
     
  3. HE15MAN thread starter macrumors 6502a

    HE15MAN

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    Sep 3, 2009
    Location:
    Florida's Treasure Coast
  4. Rodimus Prime macrumors G4

    Rodimus Prime

    Joined:
    Oct 9, 2006
    #4
    yes and you could up that to increase it to what ever your mortgage amount is for less of a cost than buying mortgage insurance.

    Increase you term life insurance police or buy another life insurance policy to cover the cost. It is cheaper than the mortgage one providing that you are in good health.
     
  5. ucfgrad93 macrumors P6

    ucfgrad93

    Joined:
    Aug 17, 2007
    Location:
    Colorado
    #5
    Agreed. These are way better options than you are getting in the mail, OP.
     
  6. eawmp1 macrumors 601

    eawmp1

    Joined:
    Feb 19, 2008
    Location:
    FL
    #6
    Mortgage insurance a rip-off.
    Buy term to cover payoff (and remember, as the loan matures the principal remaining shrinks), and to cover significant other, and dependents to age of indepence. Hopefully you can have a nest egg built up that you wont need futher term after the intial policy's term is up. And DON'T CONVERT TERM TO WHOLE LIFE.
     
  7. Mord, Jun 23, 2011
    Last edited: Jun 23, 2011

    Mord macrumors G4

    Mord

    Joined:
    Aug 24, 2003
    Location:
    UK
    #7
    No, I'm completely uninsurable.

    I would though, if it I was quoted a reasonable amount, aka less than £200/month.

    Apparently they think I'm about to drop dead any second now.

    Oh and yeah, I don't see how it's an advantage to get mortgage specific life insurance, it seems to reduce the pay out over the term for no good reason, better to just get how much your house worth in regular cover. Though I get rejected for that just the same.
     
  8. Keebler macrumors 68030

    Joined:
    Jun 20, 2005
    Location:
    Canada
    #8
    Wirelessly posted (Mozilla/5.0 (iPhone; U; CPU iPhone OS 4_3_1 like Mac OS X; en-us) AppleWebKit/533.17.9 (KHTML, like Gecko) Version/5.0.2 Mobile/8G4 Safari/6533.18.5)

    Btw, good on you for doing this. My wife is in the life insurance / investment business and she sees horror stories of ppl not properly prepared.

    The other big one now is critical illness. They call it the 'no brainer' insurance bc if u dont use it, u can cash it out later but if you need it, there's a lump sum for your family. Ppl get seriously hurt or sick usually before they die so C.I. Can definitely help in a sudden situation when an earner can't go out and earn

    Cheers
    Keebler
     
  9. StvenH90 macrumors regular

    Joined:
    Jun 13, 2011
    Location:
    Florida
    #9
    As others say, term life insurance is the way to go.

    Even though, I am 20 and heathy (with no open loans). I have 100k policy, for like $10 a month through my insurance agent. It's nice to know if my stupid exceeds my skill, my family wont have the financial hardship over my death. Heck 18 years ago my fathers funeral cost $15,000, hate to price one out today.
     
  10. snberk103 macrumors 603

    Joined:
    Oct 22, 2007
    Location:
    An Island in the Salish Sea
    #10
    The reason mortgage insurance is not a good deal is that over time you payments don't decrease, but the payout does - since you are paying loan back over time. In the final year of your mortgage you are probably paying more to the mortgage insurance company than you would get back should you kick the bucket. Or, it only really pays off if you die in the first couple of years.

    As others have said, get the equivalent value in life insurance.
     
  11. HE15MAN thread starter macrumors 6502a

    HE15MAN

    Joined:
    Sep 3, 2009
    Location:
    Florida's Treasure Coast
    #11
    Yes I am in good health and am still young. Thanks for the help guys :) I plan on doing what my grandparents on my moms side did. They went ahead and bought all their funeral arrangements and the companies honor that price and will bury you in the future for the price you paid. They did it in the 70's so saved a ton of money compared to todays prices
     
  12. annk Administrator

    annk

    Staff Member

    Joined:
    Apr 18, 2004
    Location:
    Somewhere over the rainbow
    #12
    Here in Norway it can be a very good idea. For us it was less expensive than mortgage insurance, and it has another advantage for families with children from previous marriages: the insurance goes specifically to the beneficiary, and not into the estate to be divided.
     

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