Don’t get me wrong, I’m a firm believer we learn from our mistakes. I like that with age, comes wisdom (for the most part) and I rarely look upon my experiences with regret. How else would I know never to ride my bike “slightly” intoxicated or to NEVER wear high-waisted jean shorts? Living is learning and vice-versa my friends.
However, there are instances I wish I knew then what I know now; for example, when I bought my first home.
Footloose and fancy free, I bought my first home in my twenties – without much guidance or knowledge of what I was doing. I went through the motions, put down a small down payment and signed a mortgage with the bank. It was an easy process, not to mention exciting. At the time, life insurance didn’t enter into my mind. I thought life insurance was something settled families buy into, not an unmarried, childless chick, such as myself. I was buying a house; this was not the time to think about my impending death!
What a shame. It turns out ignorance is not bliss.
I honestly did not know Mortgage insurance and life insurance serve the same purpose. But on the bright side, it’s never too late to set things right… or to share my new-found wisdom with others in the chance I spare them the embarrassment of ‘not knowing’.
With the chance you were wondering, here are the most important differences between a mortgage and life insurance:
- Cost: 99.9% of the time premiums on mortgage insurance are typically higher than on life insurance.
- Convenience: Insurance through your lender can usually be arranged quickly and easily when you sign your mortgage papers. Life insurance involves more time and effort (but then, some things are worth the effort)
- Portability: If you change lenders or sell and buy a new home, you’ll have to apply for a new mortgage insurance policy. Term life insurance, however, stays with you.
- Payout: With bank insurance, the amount of insurance protection reduces as you make your mortgage payments. But the amount of life insurance protection never decreases unless you request a reduction.
There are other differences between the two but if this is something you’re interested in, drop a line to our Life Insurance Specialist Michael Tomlinson and he’ll fill you in on all you need to know.