Mortgage Life Protection Insurance

[jazz4cash]

DB called to ask what I knew about mortgage life insurance. Nothing.

When I retired I considered looking into it but I got a regular term policy instead.

I tried to find out why he thinks he needs insurance but he didn't say and I didn't press. He's divorced and mid-60s.

 

[Sunset]

It's so if you die, the bank gets paid

It is really just expensive life insurance for most folks.

If he dies, who gets what and how much of the house is already paid off ?

If he dies, won't the house be sold anyway ?

I always turned it down, as it's just a money maker for the bank to insure the mortgage is paid.

 

[Walt34]

It's so if you die, the bank gets paid

It is really just expensive life insurance for most folks.

If he dies, who gets what and how much of the house is already paid off ?

If he dies, won't the house be sold anyway ?

I always turned it down, as it's just a money maker for the bank to insure the mortgage is paid.

What he said.

Also, it's paid to the bank instead of a spouse/children, so that reduces their options. Maybe they'd rather sell the house and go to college - that option would be available, but more cumbersome because they have to sell the house (and pay the transaction costs) first.

 

[6miths]

Yes just another ripoff for that bank to make money on. If required, one is better to get straight term as it will be under the control of the benefactor (who will not be the bank).

 

[exnavynuke]

If your significant other/family/etc would be living in the house you're responsible for paying the mortgage on AND you have health/age issues that makes traditional life insurance policies prohibitively expensive, then I think it can be a good deal in those cases for people in such circumstances. Most people, however, can get more life insurance coverage at the same price for cheaper and that money can go directly to their heirs to use as needed instead of straight to the bank to get rid of one monthly bill.

 

[jazz4cash]

Thanks to all for feedback. I need to get more details on his situation.

 

[pb4uski]

Yes just another ripoff for that bank to make money on. If required, one is better to get straight term as it will be under the control of the benefactor (who will not be the bank).

+1