Insurance
Mortgage Insurance
CHOOSE A PLAN THAT PROTECTS YOU INSTEAD OF THE LENDER
Private mortgage insurance, often referred to as PMI, are mortgage life insurance products that protects the borrower from the lender in the event of default which generally, covers a substantial portion of the capital borrowed. They are insurance products of private insurance companies
| YOUR OWN PLAN | BANK’S PLAN | |
| Protects your family | Protects the bank | |
| Gives you control: you own the policy, choose beneficiary, and select type pf coverage you want. | Policy control the bank: the bank is the beneficiary | |
| Is fully portable: your plan will continue when you move and you don’t have to buy a more policy (if your older). | Not portable: protection runs out when the house is sold or traded | |
| Provide flexibility: upon death, your family has the option of paying off mortgage or investment the funds if the economic conditions warrant it. | Inflexible : the mortgage must be paid off upon death regardless of other investment opportunities | |
| Allows shopping for internet rates: upon renewal, you are not tied to one lending institution and shop around for better mortgage rate. | No shopping: unless you are willing to pay higher premium and are insurable. | |
| Offer you a choose of plans and benefits: you choose the type of policy and benefits you want. Term plans can be converted to a permanent plan without medical. | Limited choices: limited plans and benefits offered and no conversion privileges. | |
| Gives you a choice of amount of coverage: you choose amount of coverage you require and the coverage does not decrease as mortgage is reduced. | No choice of amount of coverage: coverage must be equal to the mortgage and decrease as the mortgage is reduced (the price does not!) | |
| Provides stable coverage: Your personally owned plan has built in grace periods from 30 to 90 days for missed premiums | No stability: a missed mortgage payment often means lost coverage | |
| Expert advice: you deal with professional advisor about insurance and all your insurance coverage can be through one broker | No expert advice: you deal with the banker about insurance matters and your coverage is spread all over |
A personally owned plan can ensure that your family will able to stay in their home if you or your spouse dies before the mortgage is paid off and its offers better value for your money.
Life Insurance
It’s one of the most responsible decisions you can make…..
Many people buy life insurance to help ensure their loved ones can continue to enjoy the quality of life they deserve. However, life insurance can also be a useful financial tool to enhance your wealth during your lifetime. In making the choice to buy life insurance, here are just a few of the ways it can help.
Safeguard your family’s financial security.
If loved ones depend on you for their day-to-day needs and future well being, it’s crucial that you have life insurance coverage. Consider some of the ways your family can use it to maintain the same lifestyle:
- Replace your lost income
- Pay off outstanding loans and debts
- Cover final expenses such as funeral costs and taxes
- Help pay for your children’s education
What’s more, life insurance doesn’t have to be expensive.
Protect your estate.
When your appreciated assets and investments transfer to your heirs, a significant percentage of the gains could be subject to substantial capital gains. For example, if you bought a second home or a seasonal property for $ 70,000 and it’s now worth $ 270,000, then $ 100,000, representing 50% of the $ 200,000 capital gain, would be taxed at your estate’s marginal income tax rate. If that rate is 45%, then your heirs would incur $ 45,000 in immediate tax liability.
To avoid this situation, you can purchase life insurance to pay for this potential tax liability. What’s more, the death benefit payment from your policy will be tax-free.
Note that probate fees are applicable if you have not designated a beneficiary and the proceeds of your policy become part of your estate.
Enhance your retirement income
If you’re worried about not having enough retirement income, tax-exempt universal life insurance can allow you to accumulate funds without being taxed on its earnings. Universal life insurance policies usually increase in value over time. When you retire, you can use your policy as collateral to apply for a series of loans – without tax implications. At the time of your death, the loan amount and interest can be repaid through your policy’s tax-free death benefit.
LIFE INSURANCE FAQ’S
