You have reached a very important stage of your life when you decide to purchase your home.
In more than 90% of the case, though, you need a financing and you apply to a financial institution for a mortgage.
What happens next is that the aforementioned financial institution is after you for a life insurance, because they want the guarantee that if something happens to you (understand – you pass away) they will be able to recover their money.
So, they offer you Term life insurance. Even if they persist to sign up with them, do not forget that you have another option: to apply for your personal life insurance with an insurance company.
Here is some information that you may like to consider so that you can make and informed and educated choice, that you will not going to regret down the road.
If you sign for a group life insurance with the financial institution:
– you do not own the insurance; the bank is the beneficiary. It means that if in the future you decide to change bank because of better interest rate or other reason, your insurance will be no longer valid and you will have to sign up for another one. But …… you will be five years older, and….. rates will be higher;
– even if they claim there will be no medical check-up, it will be done later, at the time of the claim, when you will be older and your medical status could be deteriorated, or if you are diagnosed with critical illness in the meantime, the bank can deny payment;
– with the years, your mortgage will decrease, while you will continue to pay the same premium; they can even be increased any time.
What are the benefits to have your personal life insurance with an Insurance company:
– You choose your beneficiaries and they can use the money at their discretion;
– You may be given preferred rates, if you are in good health, your coverage remains the same and your premium is guaranteed;
– Your life insurance remains valid even after your mortgage is paid off, it continues if you decide to change the bank and can be converted into a permanent one.