Mortgage Protection Buyer’s Guide
Mortgage Protection 101:So what is mortgage protection?
Well, since you are reading this I’m guessing that you have closed on a newly financed mortgage recently. Typically a few weeks into your mortgage, you’ll get a slew of mortgage protection offers in the mail. Some are fancy and say a lot, some are simple and don’t say much aside from the important details. You may already just throw away the whole lot of them. The important thing here is that you stumbled across this buyer’s guide in order to really educate yourself on making the right choice.
If you have a mortgage and/or a lot of debt, then you need to protect your assets from it. That’s where mortgage protection steps in. Typically, mortgage protection is a plan that you pay for either each month or in one lump sum. The money that goes into the plan is invested to build up interest. That interest is then typically reinvested into the policy to keep the premium payments low, establish a cash save to pay on all assistance promised (required by law), build up a cash value to the long-lasting plans, and to keep a small slice of profit.
The options you have obtainable for mortgage protection are: decreasing term, level term, and long-lasting (either whole or universal). Decreasing costs about the same as the other plans but the assistance decreases as you pay into and your debt decreases. Term is usually least expensive but only lasts for a certain period of time (10, 20, 30 years). long-lasting can cost more initially but it accumulates cash value that can be used to pay bills in the event of job loss or can be used to supplement retirement or already accelerate your mortgage to pay it off 10 or so years early, which typically saves tens of thousands of dollars in interest paid.
Your assistance is paid in the event of your death or, if the policy has these options, can be paid in the event of a qualified illness. If it pays on your illness then it can help pay off your debt and give you the option to get the best medical care that it can buy. Last but not least, your payments are made based on your likelihood to use the plan before it matures, i.e. if you’ll die early.
What You MUST Do BEFORE You Decide On What Insurance Company To Use
Step #1: Keep Reading.
Insurance is a serious matter. It is at the utmost importance that you get exactly what you want and need with your insurance before you write that check. Otherwise, you could be paying too much, or already worse, too little for the proper coverage. Think of the frustration that someone has when they realize that their insurance company doesn’t cover their needs. Now, your agent may have your best interest in mind but not only do they need to take the time listen to your needs and match you with a proper plan, they must also look at multiple options to ensure a proper fit. Just keep reading to make sure you know what you want and need. This will cut out the guesswork and save not only time, but your valuable money.
Step#2: Read Some More, Decide, Then Make The Call!
You did your homework. You have your game plan. The next step is just make that phone call and get in touch with someone who has what you need. Do that and the rest will be easy.
What Questions You Should Ask The Insurance Company To Save $$$’s
All it takes is to just ask the basics. This simple step is often lost in translation during the whole presentation.
It is up to you to tell the agent to stop and back up whenever they say something that didn’t quite make sense. More than likely, they will be more than happy to explain their recommendation in detail. If not, then you may have to be a little careful about the experience and/or the motives of your agent.
All plans have the same basis despite all the extras, however nice. consequently, make sure you know whether it is a decreasing, term, or long-lasting plan that they recommend. The next very important question is to ask what rating are they quoting your price on. Many companies assume you are an elite athlete and give you their best possible quote when in reality, you’ll be asked to pay more. The proper terms are Preferred Plus, Preferred, Standard (what they should quote you) and Substandard (or rated, which method you’ll be paying more than average). Being rated may be discouraging but what it method to you is that you need the plan more than the average person and you are lucky to not have been declined all together.
The last good question to ask would be to understand all the additions (or riders) that are obtainable or included.
Ask them that, and you’ll have the upper hand. Knowledge.