baddog

I just got off the phone with an old flame. Her husband died in a freak accident last November.

"All those times I threw away those advertisements for mortgage insurance for just $20 a month, I feel like a fool. I never thought he would just die."

The guy did not have life insurance either. So now she has two teenage daughters to raise on about $30k/year from Social Security. If she makes more than $12k a year she loses that too, so she is pretty well screwed.

Moral of the story: If you have a family, spend a few bucks and a least give your survivors a cushion. No one is invincible, and you never know when your time is coming.

Trixxxia

Really sad

Here the banks pretty much oblige you to get it. No ifs, ands or buts....you borrow, you get insurance.

*for mortgages that is* - actually, let me correct myself - they really (PUSH) you to get it, it's not obligatory but I have yet to hear of anyone I know that didn't take it and when I worked in the bank, we basically 'forced' them to take the insurance.

baddog

Homeowners insurance and mortgage insurance are not the same thing.

Yes, it the place burned down there is insurance to replace it, but mortgage insurance is there in case one of the people that makes the payments dies, then the payments are taken care of.

Two different things. The bank doesn't make you get mortgage insurance because if you don't make the payments, they simply foreclose.

stickyfingerz

<--- Has 1,000,000.00 policy. Of course I do uprigging 120ft above the concert stage when Im not behind a computer, so I really need to have it. 1 million isnt that much really when you think about it. 200,00 or so just to pay the house off. The rest properly invested should last a while and put my two kids through college.

$5 submissions

Very good advise, BD. I gotta start looking around for life insurance and other asset protection. I wouldn't want my wife to be burdened if I die early.

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Trixxxia

No baddog, I understood what you were talking about. I edited my post to include that we didn't 'oblige' them but sure as hell pushed it. We'd figure the cost into the monthly mortgage payment and give them all the worse case scenarios to make sure they saw the benefit of it rightaway.

The homeowners' insurance had to be taken care of by the time the documents were signed at the notary.

The life insurance was taken care of when applying for the mortgage loan - it even had an effect on the credit score given by the bank on how 'good of a client you were' since banks & Insurance companies (at the time that I was working there, were merging in Canada) & it basically became product tag-ons. *but with serious value to the client*

Furious_Male

Not married with children but I have 1 million worth of life insurance to take care of any mess I leave behind.

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Syl

Since I have had children I have always held an insurance policy up until about a year ago. I need to get it back, this is an eye opener for sure.

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abyss_al

great advice... but those damn companies do some shady shit too... make sure those of you who are getting any kind of insurance hire an attorney and go over them thoroughly.. worth the money

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baddog

Good call. not everyone can afford a million, but you should at least make sure the kids have a roof over their heads until they graduate high school. College is a perk.

When I was married I kept just enough insurance that I would still be missed. You never want to be worth more dead than alive.

SilentKnight

Timely reminder.

stickyfingerz

Well I work in a high risk profession so gives me the peace of mind I need when up crawling on an 8" or 10" beam.

PixeLs

Exactly what our social security agencies are for. Nice one Baddog.

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nojob

Many people do not think about things like that. I am sure many people should appreciate you bringing this to life. Life Insurance is a must when you have a family or even if you just would like to leave things to your siblings, besides the bills.

fr0gman

That would be the very reason that as a condition of my job I had them buyt 500,000.00 in life insurnace. If I kick it the compnay gets 200,000.00 and my familiy gets 300k.

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SGS

Property prices here in the UK and the scandal of insurance gross miss-selling during the 80s means that *most* sensible people here now have excellent insurance thankfully.

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Elli

My bank forced us to get mortgage insurance when we took the mortgage. It was mandatory. My credit cards also all have insurance and medical plans optional on them for like $10 a month, which I usually take.

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baddog

I don't know why a bank would care, especially not with a single person. Are you sure you are talking about mortgage insurance and not fire/home insurance?

MikeSmoke

One other note about life insurance - even though you may *think* you're too young to have to worry about it, remember this.
Once (if) you unexpectedly contract an illness, you can be permanently uninsurable. So while you may say "I'll worry about that when I'm in my 30s (or 40s, or whatever)...if you contract an illness when you're 32, you could be SOL in terms of being able to protect your family with life insurance.
I don't have any axe to grind in favor of insurance companies, just experience - I was incorrectly diagnosed with colitis at one point, and it was going to cause a problem in getting a decent sized insurance policy until the mistake in the diagnosis was discovered. And my gf, who's only 27, got hit with a triple-whammy of chronic diseases without warning --- even though she shouldn't need insurance due to other factors, she'd be totally SOL for the rest of her life if she ever wanted to get insured.
Bottom line from my experience - get it *before* you need it, because later in your life when you decide/realize that you do need it (if you get married or have kids late, for example) - it may be too late.
One other note - my "major" life insurance policy is in conjunction with an investment vehicle that shelters income - not a bad thing to look into if you're turning over way too much of your income to Uncle Sam every year.

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rowan

That wouldn't be Lender's Mortgage Insurance would it? Might have a different name elsewhere but here it's basically to ensure that the banks get paid out in full if you default on repayments. You are then still obligated to pay the insurance company the balance. It's mandatory if you're borrowing more than 80% of the value of the property and it's usually around 1-3% of the amount borrowed.

That's how it's typically done in Australia, it will probably vary in other parts of the world...

Elli

Ermm that sounds like what it was, actually. My bad.

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rowan

I think this is a wakeup call for myself as well, I'm pushing some fairly large transactions through my CC each month for business purposes and it could get ugly if I wasn't around to explain the whole structure. I also deposit cheques rather than do wires, so getting the money into our account involves a manual deposit of a foreign currency cheque. My wife knows very little (and doesn't want to know) about the money side of things. We have a daughter and a mortgage.

Time to look into at least health and life insurance...

xclusive

Great post BadDog, I have had life insurance since I was 23 and I am going to add on to it now that I have another child on the way. People who do not get it are fools. I also have mortgage insurance so that I now know that if anything ever happens to me my family is taken care of.

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