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 Posted: Mon Oct 20, 2008 9:23 am Post subject: Decreasing Term Life policies |
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Hi!
Are all the mortgage insurance policies actually decreasing term life policies? Is credit life insurance similar to that of the Mortgage life insurance?
Mermaid-attitude
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Mermaid-attitude
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| Posted: Mon Oct 20, 2008 9:47 am Post subject: |
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I believe they are one in the same and a HUGE rip off (IMO)
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Lori
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| Posted: Mon Oct 20, 2008 10:10 am Post subject: |
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| Quote: | | Are all the mortgage insurance policies actually decreasing term life policies? |
Not necessarily, depending upon your requirement you may choose a level term life policy in which the death benefit will remain same for the entire term of the plan or may choose the decreasing term life plan where the coverage level will adjust accordingly with repayment of the mortgage loan. |
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jeorge
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| Posted: Mon Oct 20, 2008 10:23 am Post subject: |
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Hey jeorge I'd like to differ with you in this ground. The mortgage life insurance is a form of decreasing term life policy where the policy coverage declines with the mortgage outstanding amount.
Incase of mortgage life policy the coverage level is initially equivalent to the mortgage amount of the applicant. It then gradually decreases as the policy holder continues repaying the mortgage loan.
Hope it helps.
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JeremyHolter
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| Posted: Mon Oct 20, 2008 1:22 pm Post subject: |
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| Quote: | | Is credit life insurance similar to that of the Mortgage life insurance? |
A credit life insurance policy would reimburse for debts under circumstances when the policy holder passes away or becomes disabled. Such debts could arise out of auto loans, assets etc. It is certainly one kind of decreasing term policy.Thus, you see my friend how this insurance could cover a lender from a debtor. Yes, it might just seem quite similar to that of the mortgage life insurance, but remember that they are certainly not the same. Whenever you're out to cover huge financial objects you'd be provided with such policies.
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roddick
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| Posted: Mon Oct 20, 2008 1:28 pm Post subject: |
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Mortgage insurance is a huge rip-off. The value of your policy decreases equally to the value of home mortgage - all while the premium each year stays the same.
Bad. Boo..hiss...
Why not just buy a regular 30 year term?
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LifeIsGood
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| Posted: Mon Oct 20, 2008 1:30 pm Post subject: |
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Hi,
Yes, there is quite a possibility that you'd obtain such coverage in the event you cover a larger cause. You'd need to sign an agreement of loan with the carrier. Your premiums would accumulate upon this loan agreement. Even though it is your choice, remember that it may prove a bit costly. Under many occasions it is not lawful for a lender to force you to go for such coverage..but then its your choice after all! Crossbreed
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Crossbreed
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| Posted: Mon Oct 20, 2008 1:35 pm Post subject: |
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Well my friend, I'd never advice you to go for Credit life insurance if possess a good life insurance already (especially one that supports your financial requirements). I mean- you'd need to make sure whether it already meets your debt repayment need.If it does..I see no reason why you should go for such expensive coverage!
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Plasticmind
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| Posted: Mon Oct 20, 2008 1:44 pm Post subject: |
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Yes my friend..you're quite right when you say..
| Quote: | | Incase of mortgage life policy the coverage level is initially equivalent to the mortgage amount of the applicant. |
I'd agree to the fact that the death benefit would initially remain at par with your present mortgage balance. Thereafter it would start falling at par with your mortgage balance fall. when the face value gets to 'nil' the coverage would cease to exist. But yeah, the cost would remain stable for the entire term. Purpleheaded08
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Purpleheaded08
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| Posted: Tue Oct 21, 2008 7:43 am Post subject: |
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| Quote: | Mortgage insurance is a huge rip-off. The value of your policy decreases equally to the value of home mortgage - all while the premium each year stays the same.
Bad. Boo..hiss...
Why not just buy a regular 30 year term?
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Yeah LifeIsGood is right. Buy a regular term insurance for you to have full coverage.
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joven222
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| Posted: Wed Oct 22, 2008 2:45 am Post subject: |
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Mortgage insurance policies may differ. Meaning there are different types of life insurance plans available to provide coverage if you pass away, leaving your beneficiary with funds to pay off your outstanding mortgage loan.
Deceasing term life insurance is one type of cover used to provide insurance to pay off your mortgage. Decreasing term provides a coverage amount that declines each year in line with your declining mortgage. The length of the decreasing term policy would be the length of your mortgage loan, for example 20 or 30 years. The premiums remain the same each year for the policy, while the coverage decreases.
Level term life insurance is another option that provides level premiums and coverage throughout the entire term of your policy. This would provide additional funds for your beneficiary beyond the outstanding mortgage amount.
Credit life insurance is insurance issued to a creditor (lendor) to cover the life of a debtor (borrower) for an outstanding loan. If the debtor dies prior to repayment of the debt, the policy will pay off the balance of the amount outstanding. Credit life insurance is usually purchased to cover small loans of short duration.
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