Mortgage or private insurance?

Mortgage or private insurance?


One fact is certain, in life, there is always a choice. And whether or not to take out mortgage insurance is one of them. But there is also a great concept called compromise, whereby we can find solutions that work best for us. So, you want to insure your mortgage, but not necessarily at any price? Here are some tips to help you see things more clearly.

Some myths

If you come across a lender forcing you to take out mortgage insurance, move to another institution. Because, absolutely nothing requires you to take 100% of your mortgage insurance with the bank, which probably sells it to you at a high price! As a customer, you have the right to purchase the insurance of your choice, at a lower cost!

One interest rate should not be higher than another, even without making sure with the lending institution. Take the time to compare. And remember, you are the customer. So you have the big end of the stick!

If you are able to buy yourself a house, then you have the skills to manage a budget that includes a monthly payment for mortgage insurance. So don't stop at those who try to make your life at all costs easier by insisting that everything be in one installment… which is much better… to tell them.

Obviously, when you take out insurance, you always think of the worst. But you may not need mortgage insurance that covers 100% of your mortgage. This will be the case if, for example, your spouse is still working (so he can continue to cover his part and maybe even yours for a time) or if you already have salary insurance from your employer.

Mortgage insurance or private insurance, the difference

The mortgage insurance offered by your financial institution contains various features that you should consider. First, you are not the owner of the contract. You will therefore not derive any direct benefit from it, since it pays for itself upon your death. The premium is calculated as a percentage on the loan. Ultimately, insurance will cost you more and take longer to pay off. Also, even if you no longer have insurance, you would still be tied to the lender.

On the other hand, personal insurance is much less expensive. You will own it and you can modify it as you see fit. In addition, you can name the beneficiaries of your choice. If you die, the loan does not have to be repaid in full and the premium is fixed, as is the amount of life insurance. You can also create a combination of life insurance covering all your needs in one single contract. If you no longer have a mortgage, you still remain insured, as long as the premiums are paid.

Privacy insurance is a money-back guarantee. In fact, eligibility for insurance is done before the contract is signed. The insurer cannot therefore change his mind at the time of disbursement.