- You own your policy and name your beneficiaries.
- You choose the amount of coverage you want, regardless of the balance of your mortgage. You can convert to permanent coverage without evidence of insurability. Coverage can continue once you renegotiate or pay off your mortgage.
- Portable; changing lending institutions does not affect the policy or the rate.
- The benefit goes directly to your beneficiaries upon death. They decide how to utilize the money.
- Premiums and benefits are guaranteed for the life of the policy.
- With a permanent policy, funds can accumulate tax sheltered and can be used to pay off outstanding principle (The Vanishing! Mortgage).
- It’s usually cheaper: The amount you pay is based on your age, health and smoking status.
- Many other advantages including Disability waiver of premium, Can be converted into cash value or permanent policy, etc.
- The lender owns the policy, and your lender is the sole beneficiary.
- Your lender will insure you only for the current amount of your mortgage.
- You cannot, alter, renew or convert the policy.
- If you want to move your mortgage to another lender, you can’t transfer the policy, and may have to provide evidence of insurability. Your coverage ends when the mortgage is paid off or ends.
- Upon death, the benefit is limited to the amount outstanding and goes directly to your lender to pay off the mortgage.
- The insurance company underwrites the coverage after death, and, for any number of reasons claims are often denied. Although you paid premiums, there really was no coverage in the first place.
- Premiums and benefits are not guaranteed. The lender can change or cancel the policy at any time.
- You pay the same rate for your coverage as everyone else, even if you are healthy, young, and a non-smoker.