If you have ever had a car accident, owned a home or had a loved one die, perhaps you are familiar with insurance. Insurance protects people from financial loss (and sometime ruin) and also can replace lost or damaged property. I just thought I would share with you some information on the most common types of insurance: mortgage, automobile, and life insurance.
Mortgage Insurance
Mortgage insurance is insurance for the lender and is sometimes required by lenders on lower down payment loans. It’s insurance that protects the lender in case you’re unable to pay. Borrowers are able to purchase homes that they wouldn’t otherwise be able to afford, due to high 20 percent down payment requirements.
Private Mortgage Insurance (PMI) is insurance on your mortgage designed to protect your mortgage company against non-payment should you not make your loan payments. Keep in mind that the goal of this insurance is to protect the lender, not necessarily you. Private mortgage insurance is frequently called for by mortgage companies because of the larger number of defaults that are a result of minimal down payment mortgages. The good thing about private mortgage insurance is that it allows borrowers to get into properties that they might not otherwise be able to purchase because of large down payment requirements.
Automobile Insurance
If you get in an accident and “total” your automobile, it’s your insurance company’s responsibility to provide you with an amount of money that would purchase an equivalent automobile. This doesn’t always happen, unfortunately. They have their own formulas and will often consider quotes from various dealers that aren’t always that attainable, and this isn’t always a good indication of your specific automobile’s true worth. Every automobile is different, with things like condition, mileage, and repairs playing vital roles. If they choose to use one of these methods, you may want to present them with some local quotes of your own. It’s recommended that you keep a documented automobile history as well, so you can present repair and maintenance receipts if there’s a dispute. Make sure the amount you and your insurer settle on includes sales tax for the purchase of your replacement automobile.
Return of Premium Term Life Insurance
Tired of all those premiums that you pay into your term life insurance policy with no guarantee that you will collect on that policy during your term of coverage? Would you like term life insurance that refunds your money if you don’t die? Well now you can it’s called Return of Premium Life Insurance (ROP). Return of premium term life insurance came about because many people outlived their term policies and had nothing to show for it.
Return of Premium or ROP combines the benefits of traditional term life insurance with a return of premium feature. Simply put your family receives a lump sum death benefit if you die, otherwise if you win your bet with the insurance company and you live the insurer returns all your premiums. This money-back guarantee can be particularly comforting for those that believe death will not occur during the term of coverage.
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