Last updated: Oct. 8, 2014
If you are considering or have elected to insure your mortgage with your local bank, there are some things you should be aware of.
1. Although you pay the same premiums each month, the actual amount of coverage decreases as your mortgage decreases.
2. Coverage typically ends at age 70 regardless of whether you have paid off your mortgage.
3. There are often exclusions contained within the contract that aren’t typically included in most life insurance contracts. These exclusions could result in non-payment of benefits to the beneficiary.
4. If you move your mortgage to another financial institution, your insurance coverage terminates and you will have to obtain new coverage at your current age.
Cost Comparison
$500,000 Initial Mortgage Amount vs. $500,000 Level Benefit Amount
|
Gender, Age, |
Bank (per insured) |
FBC Financial & Estate Planning Services |
|
Male Age 36 |
$100 monthly / |
$52.91 monthly / $635 annually |
|
Female Age 36 |
$41.25 monthly / $495 annually |
|
|
Male Age 41 |
$145 monthly / |
$78.33 monthly / $940 annually |
|
Female Age 41 |
$59.58 monthly / $715 annually |
|
|
Male Age 46 |
$215 monthly / |
$127.92 monthly / $1,535 annually |
|
Female Age 46 |
$92.50 monthly / $1,110 annually |
Among the many benefits of purchasing term life insurance, your heirs will receive any proceeds over and above the outstanding balance of the mortgage. You also have the ability to convert your term policy to a permanent policy in the future.
Want to know more? Check out FBC Financial and Estate Planning or call 1-800-265-9237.