After buying a house, one of the biggest things you need to think about is protecting that investment. Which means, you have to start thinking about Fredericton mortgage insurance.
There are some important differences to think about when it comes to mortgage insurance and term insurance. Fredericton Mortgage insurance will pay the balance to the pay if the person listed passes away. This is something to consider, since whoever will inherit your home won’t have to worry about that extra debt to pay off when you pass away. The last thing you want to do is leave that liability behind to your loved ones.
Mortgage insurance is also referred to as creditors insurance. This insurance is offered by the bank and can be purchased when signing your papers. Usually they ask you a few questions about your health. However, this insurance will definitely cost you.
One thing to remember about mortgage insurance is, even if you are paying the premiums, you might not always be covered. These policies use post-claim underwriting, meaning that the insurance company will look into your medical history after a claim is made. So if you have a health condition, whether you or your doctor know or not, and it is not disclosed, this means your claim may be denied.
Another difference is, since mortgage insurance only pays out the balance of the mortgage if you die, the amount of coverage decreases each month as you are paying off the mortgage. You will also need to renew this policy if you end up remortgaging. This could mean that your premium could go up, depending on your health issues at the time of renewal.
Term insurance is insurance that covers you for a set number of years. Your premiums, and the amount your beneficiaries will get stay the same over that period of time. So whenever you pass away, your family receives the payout and decides what they want to do the money.
Term insurance is much more portable. If you get mortgage insurance, if you switch lenders you have to open a new policy. Term insurance is attached to you, and not the debt itself.