"Everything is changing. Nothing is new.": Old saying.
It is not actually newsworthy that builders and bankers want you and your clients to pay Premiums on Insurance Policies for the purpose of insuring your Mortgage Payments. It has always been called Mortgage Insurance.
The answer to the question of who really wants this type of Insurance is answered by who gets money from selling it to you and to your clients. They are not you or your clients. They are instead the builder who sells you a new house and folds the Premium amounts into the purchase price that the builder receives from you, and the banker who receives the Insurance payment if you cannot make your Mortgage payment to the bank. The builders and the banks in 2011 are offering this Insurance to you and to your clients for "free," they say, although the Premium amounts are still part of the purchase price and so they are part of the amount mortgaged too. Another "new" approach by builders and bankers urging you and your clients to get this product is that this Insurance is just the right financial product to continue to make payments in the event that you or your clients lose your jobs -- continue to make payments to them, the builders and bankers of course.
The current developments are reported by Kenneth R. Harney, "Builders, Banks Offer Free Job-Loss Insurance to Home Buyers" (Los Angeles Times Online, latimes.com, Sunday, March 27, 2011). The reporter in this linked newspaper article suggests that in at least some situations "job loss coverage can be a 'why not?' proposition."
Before you advise your clients to purchase this sort of Coverage, or buy it for yourself, consider just how important it is to you and to your clients to continue to make payments on a Mortgage even if jobs are lost and people die and any of the other events occur that make payments on a Mortgage perhaps of less concern to you than to the builders and bankers who try to convince you to buy the Insurance. And consider just how important it is to finance the Premium payments for such Insurance through your Mortgage over a term of say 30 years, rather than purchasing the Insurance directly from the Insurance Company and perhaps purchasing Coverage that also provides for payments to you or to your clients and not just to Mortgagee Banks.
Builders build and sell houses. Bankers sell Mortgages. Their expertise in selecting Insurance products is likely nonexistent, it is not what they do for a living. Your expertise in buying Insurance is better than theirs. Realize that, and ask questions.
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