mortgage insurance vs. life insurance
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Thread: mortgage insurance vs. life insurance

  1. #1
    ...... Array Team Green 9R's Avatar
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    mortgage insurance vs. life insurance

    I know there has to be a few people that know a heck of a lot more abotu this than me.

    Would it be better to get mortgage insurance or life insurance? We bought a house a couple years ago, we are thinking about getting life insurance on the offchance one of us dies, the house would be paid for. If one of us died the other would not be able to afford the mortgage alone. We were looking at life insurance at $400,000 each and over 20 years we would be looking at approx $72 a month combined for the 2 of us. We could get it for 10 years for approx $54 combined but then if we wanted to get more ( which we really wouldnt need that much considering in 10 years the mortgage would be alot less) we could renew at like 150 or something ( I forget the exact number right now)


    Suggestions?

  2. #2
    Posing with conviction Array heisenberg9's Avatar
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    Mortgage insurance for us is something like $32 per person which pays out the mortgage if one of us croaks.

    I wonder if it is generally more difficult to get life insurance if you ride a motorcycle. Anyone care to expound while we are on the insurance topic?

  3. #3
    Mortgage Pimp Array J_Scott's Avatar
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    I'm just here for the intelligent conversation.
    motorcycle racing makes it more difficult.. motorcycle RIDING does not.

    I'm a mortgage broker and I DON'T sell mortgage insurance if my client can qualify for life insurance... so that should be pretty clear.

    call Lee Heaver, he'll help you out. and he sponsors the board.

  4. #4
    Registered User Array rgm's Avatar
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    My what?
    The value of mortgage insurance goes down with every mortgage payment but your monthly payments don't (usually). If you die and you owe $192000, that's what you get. If you have life insurance that is worth $500000, it doesn't matter what you owe on your house you still get $500000. I would much rather leave my family enough to pay off the house and pay for the funeral, go on vacation, throw a party, get on with their lives. If you have either and something happens to you, you are helping your family out. If you have both you are just double billing yourself. That's my 2 cents
    I didn't say it was your fault, I said I was blaming you.

  5. #5
    ...... Array Team Green 9R's Avatar
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    Ya thats what I was thinking. Looks like life insurance it is.

  6. #6
    Registered User Array Commuter Boy's Avatar
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    Price them both out. Life insurance with extra checks and medical inspections may be a lot cheaper, especially if you're in good health with no history of problems in your family.

  7. #7
    Registered User Array Fotura's Avatar
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    Inbetween bikes now. Thanks for bringing up bad feelings.
    It also depends on your lifestyle. We bought our house with my in-laws. They own 1/3 of the house and we own 2/3.

    My in-laws were living in Mexico on their sailboat with plans of going off-shore. Sadly that didn't happen because my father-in-law passed away from a heart attack. Before going offshore, they put their affairs in order in case something would happen to oen or both of them.

    They wanted to make sure everything was covered. They both had life insurance and my father-in-law, because he had the large income, was covered under the mortgage insurance for their share.

    My mother-in-law is now mortgage free on her portion of the house. Without that, she'd have to come out of retirement to cover the mortgage or she would have had to sell her portion back to us.
    Life is an STD with no cure and 100% fatality rate.

  8. #8
    Registered User Array Squint's Avatar
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    Life insurance for sure. Why cover one thing when you can cover everything?

  9. #9
    Doesn't register Array Mutate Now!'s Avatar
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    I'm waiting for a CLU or CFP to pipe up.

    I used to work in the industry, but got tired of being an excellent planner that only made modest income, while the best salesguy got the biggest office. Honest answer? Talk to your financial planner and see how risk management fits into your money life.

    Factors:
    Amount of coverage needed (determined by net worth and future family needs)
    Length of coverage needed (short term, term of mortgage, lifelong)
    Type of coverage wanted (term/whole/universal/self-funded)
    Type and amount of existing coverage (group through work/bank insurance/credit card insurance/etc.)
    Amount of cash flow available to commit towards risk management goals.

    That will get you STARTED. Then find a qualified planner (interview a few. finding someone you have a good relationship with goes a long, long way.) give them your secrets, and they'll give you some valid options that you can then decide on how to proceed.

    Good luck, and good on you for taking an interest in your financial future.
    Last edited by Mutate Now!; 05-11-2007 at 08:33 AM.

    This post is simply the opinion of the poster and is not to be construed as instructions or advice. Your mileage may vary.
    I rode Deal's Gap / The Dragon in September 2007 and I visited Yellowstone in August 2010. Where have you been?

  10. #10
    The Wizard Array Focker's Avatar
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    Get life insurance. When we got our mortgage, it was basically the same price, but remember the fixed term life insurance is good for 20 years or so, where as the mortgage insurance needs to get renewed everytime you renew your mortgage, so you are that much older and the insurance is that much more.
    WMRC #12
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  11. #11
    Darth Tator Array pan7eraboyca's Avatar
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    All Morgage insurance is just Decreasing Term Insurance. Your premiums are relative to your age and morgage amount everytime you renew. If your young its cheap and doesent seem like such a big deal but 40 and up the premiums are going to sky rocket. IMO get a 20-25 year term policy to cover you.

    Full disclosure: I am an Insurance Agent

  12. #12
    Lee RideFar Array elevation's Avatar
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    Here are some questions you can ask about your mortgage insurance. If you PM me with your birth dates and mortgage amount. I can give you quotes from from three insurance companies.

    I do a full insurance needs analysis with all my clients. Covering the mortgage is MINIMAL. There should be amounts available to the surviving spouse and children. Things like education funds (for the kids), lost income, and time off to adjust are very important. To be perfectly honest, dying is not cheap!

    Attachment 56093
    Last edited by elevation; 05-11-2007 at 10:54 AM.

  13. #13
    Registered User Array Commuter Boy's Avatar
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    The fun part is when you actually work out what you should have for coverage to pay off everything, the kid's college funds, some money aside for the surviving spouse to stay home and take care of the kids, then something for re-training + what you would have earned to put in your shared retirement fund.

    When we did the math, and applied for the coverage we were refused. "Too suspicious, too much coverage." The agent was astounded, he agreed with our numbers, thought we did an excellent job of forecasting the coverage we needed, especially as we were young with a family and a mortgage.

    He ended up writing two different policies for half the amount to get what we wanted.

    Anyways, you should really sit down with a couple of people to plan out your coverage needs. There's a lot of things that need to be taken care of, and your will should be tweaked at the same time to fit (you do have a will, right?)

  14. #14
    Registered User Array Squint's Avatar
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    Quote Originally Posted by Commuter Boy View Post
    The fun part is when you actually work out what you should have for coverage to pay off everything, the kid's college funds, some money aside for the surviving spouse to stay home and take care of the kids, then something for re-training + what you would have earned to put in your shared retirement fund.

    When we did the math, and applied for the coverage we were refused. "Too suspicious, too much coverage." The agent was astounded, he agreed with our numbers, thought we did an excellent job of forecasting the coverage we needed, especially as we were young with a family and a mortgage.

    He ended up writing two different policies for half the amount to get what we wanted.

    Anyways, you should really sit down with a couple of people to plan out your coverage needs. There's a lot of things that need to be taken care of, and your will should be tweaked at the same time to fit (you do have a will, right?)
    Our broker set us up with two policies each, a term 20 that will leave lots of dough while the kids are still young, and a full life that will cover expenses, estate etc. So in the next 20 years two policies would cash out each, but when the kids are more self-sufficient there's just one and it's a much more palatable cost for us now. Pretty smart I thought. Nothing quite so fun as figuring out how much money will be needed when we die.

  15. #15
    Lee RideFar Array elevation's Avatar
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    Here is another point about life insurance.

    You are actually five times for likely to use a disability policy than a life insurance policy in your life time. So keep that in mind when life insurance is your priority.

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