“Off the Cuff…”
Hi, this is Mike Sheehan from FinancialProf.org. I’m going to take a couple minutes here to talk about the key differences between mortgage protection and life insurance. All right, let’s just talk about life insurance. Name pretty much describes what it is. This is a particular policy that is going to provide for your family at the point that you were to pass away.
But you know what? Mortgage insurance is going to do the same thing. I guess the key difference is a person in their head is saying, all right, I got this mortgage. I bought this new house. I got a $250,000 mortgage. And if I were to pass away my wife. could lose the house because she’s not going to have my income any longer to pay the mortgage, to pay the taxes.
So a person would buy a mortgage protection policy to cover that mortgage. And it could be 20 years, 25, 30 years. And you say, why would you buy a 20 year if I have a 30 year mortgage? Well sometimes it depends on price. You know maybe a 30 year term policy is too expensive. The other part you say, hey, after 20 years, a good chunk of that mortgage has been paid off.
If I had kids, chances are they’ve moved out of the house. There’s not as much of an exposure as when I bought that house that first day and the kids were young and the mortgage was $250,000 or whatever it is, minus your, your down payment. Some people will get a 20 year term policy with return of premium.
Return of premium is again, just as it states at the end of the 20 years and you’re still kicking the insurance company will give you 100 percent of that premium that you 📍 paid into that insurance policy. Some people use that, they’ll put it in a side account and maybe it’s in enough money that they’ll use it to pay off the balance of their mortgage.
Some people may just set it aside to use it as a insurance policy. Some people will spend it. But it’s another option. And again, there’s a price difference in it, but sometimes it works. Sometimes it fits for your situation. In regards to life insurance, a person could use a term policy. They may, you know, depending on their age, look to more of a 30 year, but again, the 20 year may fit just based on price.
So a lot of it depends on price a lot of it depends on price, a lot of it depends on price and your situation when you know, at the point that you’re taking that out. Now, one of the neat things that we have on our site here on the FinancialProf.org site is a calculator. You can go in, click that calculator, and put your numbers in it.
It’ll tell you what you should have. And that will incorporate, you know, loss of income, Social Security maybe you have some retirement money already. And, and mortgage, you know, and the monies needed to satisfy your day to day bills, electricity, heat, food, so on, insurance, homeowner’s insurance, car insurance, car payments, you know, those types of things.
So you can go on there and find out that number for yourself. But as far as a difference, they’re both kind of doing the same thing. They’re there to protect your family in the event of an unexpected death. So if you want to make sure that you get any of our videos in the future, make sure you like subscribe turn on your notifications hit the share button.
