Are you ready to take out a loan or mortgage
With low interest rates, banks are profiting from mortgages with other products such as life insurance
Normally, when we go to apply for a mortgage from the bank, they offer us (or include) other products or services with it. A typical case is that of mortgage life insurance title loans aiken sc.
However, even if the bank offers it, this is probably not the best possible mortgage life insurance option.
We must bear in mind that what is interesting for a bank is the profitability it obtains from our operation, which also includes other accessory products: cards and, above all, insurance.
In principle, in terms of coverage or services, there is no difference between mortgage life insurance from a bank and mortgage life insurance from other entities such as insurers. But there is a big difference in terms of another factor: the price.
As the bank needs to maintain the profitability level of the loan, it is common practice for the bank's mortgage life insurance to be priced well above the market price of a mortgage life insurance of the same characteristics from an insurer. This difference can be up to € 500 a year, which you can save on your mortgage life insurance.
According to the study carried out by INESE and Global Actuarial, comparing 13 banks and 15 insurers, the price of the same life insurance for mortgages offered by banks is 30% higher.
A bank cannot force you to take out life insurance for your mortgage with them.
It is likely that by reading this article you already have life insurance for mortgage with the bank that granted it, you know many people who are in this situation or are thinking of buying a home. And most likely you think, wrongly, that it can no longer be fixed.
Contrary to what many people think, the Law indicates that it is not mandatory to have life insurance for your mortgage with the same bank that grants it to you. In fact, it is not even mandatory to have life insurance for your mortgage (although, as we have seen, it is highly recommended so as not to burden our heirs with the debt and that they cannot cope with it).
Obviously, you should not settle for the mortgage insurance offer that the bank makes you. Find out about the life insurance for mortgage offered by insurers and compare the price between the two.
Do some math to find out how much you would pay for your mortgage life insurance with one option or the other. As we will see later, even if the bank warns that not taking out mortgage life insurance with it will worsen the differential on your mortgage and that the interest rate will increase, this does not always mean that you will pay more.
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