Is mortgage insurance the best option to pay off my mortgage if I die? I get asked this question a lot. Compelled to help inform others who may be wondering the same thing, or those who may be completely unaware that coverage they have may notice  protect them. In short, the answer is, no. Let’s quickly look at just one basic example, among many others, as to why. The rest of the reasons are listed in a separate chart that I created below.

Consider that there’s two types of coverage options for you and your family to completely eliminate your mortgage should you pass away before your mortgage is paid off in full.

• Coverage Option A:
  –  The bank owns the policy.
  –  The bank is automatically the beneficiary of the policy (who receives the money from the policy).
  –  However, you pay the premiums. (Keep in mind, the bank is the owner of the policy)

• Coverage Option B:
  –  You own the policy.
  –  You choose the beneficiary of the policy (who receives the money from the policy).
  –  You pay the premiums for your own policy.

 
Given that both options are intended to pay off your mortgage should you pass away, which of the two coverages listed above would you choose?  Continue reading →