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Thread: Mortgage protection insurance

  1. #1

    Default Mortgage protection insurance

    have anyone heard of this? do you have any thought into it? sound like a scam to me.


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  3. #2

    Join Date
    Aug 2008
    Location
    Pensacola, FL
    Posts
    6,312

    Default Re: Mortgage protection insurance

    Mortgage protection life insurance is an insurance plan that is most likely be offered by your bank. Mortgage life insurance is insurance that is typically bought through the financial institution that has your mortgage (like your bank). The amount of coverage that is purchased is the amount of your loan where if something happened to you the bank would be the beneficiary and pay off the loan. In most cases, the policy is a decreasing term where as the years go by the amount reduces as you’re paying your home loan down although the premium you pay stays the same.

    Better off buying life insurance. I might consider it only if I did not qualify for life insurace and I have a family. But I would exhaust all my options first.

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  5. #3

    Join Date
    Dec 2007
    Location
    inland Northwest
    Posts
    4,124

    Default Re: Mortgage protection insurance

    Hmm, maybe I have something to learn here. My understanding is that UNLESS you put down 20% or more, your mortgage company requires you to carry Mortgage protection insurance. If you don't buy it, they'll buy it for you and roll it into the mortgage-usually much higher cost of the insurance than if you go and buy it for yourself. Once you have the magic 20% equity in the property, you can have the MIP requirement removed and can quit carrying it. that's the way I've always understood it to work.

    If regular life insurance is commonly accepted as substitute for MIP, I never have read it or had it explained to me that way.
    "life can only be understood backwards, but it must be lived forwards" - soren kierkegaard

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  7. #4

    Default Re: Mortgage protection insurance

    http://www.frbsf.org/publications/consumer/pmi.html
    What Is PMI?

    PMI is extra insurance that lenders require from most homebuyers who obtain loans that are more than 80 percent of their new home's value. In other words, buyers with less than a 20 percent down payment are normally required to pay PMI.
    Official Retirement Date: 06-31-2014!

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  9. #5

    Default Re: Mortgage protection insurance

    ooo thank god i ask u guys! the guy came today trying to make me buy the insurance but i ask him why would i need it if i am in the military. if i die while serving, the goverment would pay for everything but he kept on pressing me to buy it. trying to make me pay extra 75 a mont for something i already have

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  11. #6

    Default Re: Mortgage protection insurance

    Quote Originally Posted by law87 View Post
    have anyone heard of this? do you have any thought into it? sound like a scam to me.
    All insurance, by definition, is a scam. The underwriter must take in enough in premiums to cover indemnities and overhead and profit. That means on average, each subscriber will recieve less than the value they contributed. Although some will hit the lottery.

    If an insurance company miscalculates and fails to adequately manage risk, then the risk is simply re-spread among a larger cohort, ie. taxpayers, see AIG.

    It's a simple model actually, and a scam.

    If you added up all your auto insurance contributions from the day you got your drivers license and had put them in a savings account, then subract the value of succesful insurance claims, where would you be today? Would you have come out ahead on that deal?
    100g

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  13. #7

    Default Re: Mortgage protection insurance

    Quote Originally Posted by burrocrat View Post
    All insurance, by definition, is a scam. The underwriter must take in enough in premiums to cover indemnities and overhead and profit. That means on average, each subscriber will recieve less than the value they contributed. Although some will hit the lottery.

    If an insurance company miscalculates and fails to adequately manage risk, then the risk is simply re-spread among a larger cohort, ie. taxpayers, see AIG.

    It's a simple model actually, and a scam.

    If you added up all your auto insurance contributions from the day you got your drivers license and had put them in a savings account, then subract the value of succesful insurance claims, where would you be today? Would you have come out ahead on that deal?


    yea too bad u need atleast liability to be able to drive legally

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  15. #8

    Default Re: Mortgage protection insurance

    Quote Originally Posted by law87 View Post
    yea too bad u need atleast liability to be able to drive legally
    There's a keyword in their somewhere.

    If you added up all the the fines you've paid for failure to provide proof of insurance and compare that with the total cost of all the premiums you've paid to be able to prove insurance, where would you come out on that deal?

    I prefer to insure myself, and there are things you can do to mitigate the risk. Like drive $1000 vehicles, if they make it a year you are already ahead on the insurance aspect of it, not to mention the taxes or interest on auto loans.

    Of course, that doesn't protect you or anyone else from pianos falling from the sky and ruining your world, but how often do pianos fall from the sky in your world?
    100g

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  17. #9

    Default Re: Mortgage protection insurance

    Insurance will be the new business to be in as soon as they start mandanting coverage. Imagine if all people were required to buy your product that you were gauranteed able to sell at a handsome profit?

    Oh, wait...
    100g


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  19. #10

    Default Re: Mortgage protection insurance

    Quote Originally Posted by burrocrat View Post
    There's a keyword in their somewhere.

    If you added up all the the fines you've paid for failure to provide proof of insurance and compare that with the total cost of all the premiums you've paid to be able to prove insurance, where would you come out on that deal?

    I prefer to insure myself, and there are things you can do to mitigate the risk. Like drive $1000 vehicles, if they make it a year you are already ahead on the insurance aspect of it, not to mention the taxes or interest on auto loans.

    Of course, that doesn't protect you or anyone else from pianos falling from the sky and ruining your world, but how often do pianos fall from the sky in your world?
    burro are u encouraging driving without insurance? lol

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  21. #11

    Default Re: Mortgage protection insurance

    Quote Originally Posted by law87 View Post
    burro are u encouraging driving without insurance? lol
    No.

    But if you find yourself in that situation, I would reccomend respectfully explaining to the officer who you are and what you are doing, and that you aren't carrying insurance based on your moral requirements not to support graft and criminal enterprise. Then ask for a religious exemption and permission to proceed on your way.

    I have this friend, he tells me most often they will chuckle and issue a warning. The two times he has actually gotten a ticket have been relatively mild fines. One of them the justice of the peace waved the entire fine if he could provide proof of insurance by a certain date. It helped that the JP was also the local insurance agent.

    He also puts great effort into not being in a position to need, or need to show insurance, caution appears to be a pretty good form of insurance for avoiding accidents and getting pulled over. Who would have thought that? It is so much easier just to pay someone to protect you.

    It's a scam I tell you.
    100g

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  23. #12

    Join Date
    Dec 2007
    Location
    inland Northwest
    Posts
    4,124

    Default Re: Mortgage protection insurance

    Hmm, getting into touchy territory here. The uninsured drunk driver of mega-pickup who fell asleep and hit two other vehicles before hitting my brother and family headon-sure wasn't self-insured. Going to prison (which he didn't, even tho repeat DUI we learned),sure didn't help my brother and family with the major medical bills the other guy couldn't pay-that brother and family had to fork out of own savings.

    Not to mention the nearly 2 years brother wasn't able to physically work as mechanic and gain work experience as mechanic on first job out of diesel school, not to mention vehicle damage to only family car.

    fortunately his employer kept him on as janitor through that period of time until brother threatened to leave if employer didn't get him back to skilled job he went back to school for post-navy.

    But of course most uninsured (self-insured) don't go around drunk driving and hitting innocent families head on on secondary highways.....
    "life can only be understood backwards, but it must be lived forwards" - soren kierkegaard

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