A Policy from Life Insurance Companies in Colorado vs. Your Mortgage Lender
If you own your home, you were most likely offered specific coverage by your lender. Called mortgage life insurance, this option does have many benefits. And plus it can be a real hassle to get out of, requiring you to sign one form after another to decline it before you can seek out a policy from life insurance companies in Colorado and to get your adequate coverage.
Is the policy that came with your mortgage really better than getting your own independent policy? As if it wasn't difficult enough to decide, both option have their pros and cons.
The Benefits of a Policy from Your Mortgage Lender
As with other types of coverage, it is designed to be a safety net to cover your bank loan and repay your mortgage in full in the event of your untimely death, which can give both you and your family great peace of mind. As well, the cost of having this coverage is pennies a day. And the convenience of being able to get a policy at the same time you get a mortgage can't be denied.
Another big advantage of signing on for a policy with your mortgage lender is that you can get coverage that's nearly universal, without the need for underwriting, as there's no medical or blood sample requirements when you first sign up. This can be great for those who have a pre-existing condition that would prevent them from getting independent coverage.
The Disadvantages of Mortgage Life Insurance
What many homeowners don't know is that it isn't you or your family who is insured.. Instead, the bank who is lending you the money for your mortgage will be the one to benefit in the event that you pass away, not your family. The bank receives the money that will fully pay your mortgage, absolving your estate of any mortgage liability.
The other bad news is that you don't have any say in where or how your policy benefits are directed; all of them go to the bank, and only the bank, when you pass on.
As well, your premiums will not change, even though you may be making your mortgage payments on time, every time.
The Reasons for Getting Life Insurance
Most people seek this important safety net for one reason; to protect their loved ones financially should something happen to them. An individual policy owner can decide when, to whom and how much of the benefit will go where, so that all of the financial bases can be covered.
A proper needs analysis, conducted with your financial planner can help you to determine just how much coverage you require. But if you don't have a financial planner, you can research reputable providers on your own using the information that can be found here.
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Knowing that you have the information you need to dig deeper about life insurance companies in Colorado you're interested in can mean a much easier search experience. We understand that your time is valuable - let us help you with much of the legwork.