insurance

Myth Busting: Mortgage Insurance and Life Insurance are not the same

Mortgage insurance (also known as Credit Insurance) is not the same as Life Insurance but I fear that too many consumers don't know the difference. A lot of Mortgage or Credit Insurance is sold by lenders when consumers purchase a home or take out a line of credit. Lenders know how to lend but I question lenders being the right ones to sell consumers insurance. Could it be that one of the reasons that consumers don't know the difference between Mortgage or Credit insurance and Life Insurance is BECAUSE they have purchased it from their lender? I believe that's a good possibility.

Insuring Your Mortgage Through Lenders

Marc and Lorna just bought a house and, like most home buyers, they needed a mortgage. During the financing process, they were offered mortgage insurance by the lender. They wanted to know more before taking the coverage.

Do we control the policy? Because the coverage is usually a group plan, the agreement is actually between the lender and the insurance company. Marc and Lorna would be insured under the policy and pay the premiums, but the lender would be the beneficiary and receive all proceeds on death.

Group Insurance Will Look After Me, Won't It?

Sally has been working for the same company for over twenty years. About a year ago, she was given a new group benefits booklet because her employer had switched insurance companies. Like most people, she put it aside and intended to read it when she "had the time." Sally was just diagnosed with terminal cancer and made the time to read her group booklet. She was upset to learn that the life insurance coverage with the new insurer was only one times annual earnings. The previous coverage had been two and a half times annual earnings.

Disability Insurance

Everyone who enjoys good health hopes it will last for a lifetime. But it doesn't always turn out that way.

Sometimes life throws a curve.

Injuries can happen. A disability illness could dramatically change your life, your future, your family's lifestyle, as well as your financial security. A chronic disease or disability could keep you from working. Someone in your family could become injured and require personal care services. Insurance can't prevent those things from happening. But it can help you and your family cope.

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