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From: jvb@duke.UUCP (Jack V. Briner, Jr.)
Newsgroups: net.invest
Subject: Re: On the Worth of Mortgage Insurance
Message-ID: <6589@duke.UUCP>
Date: Thu, 14-Nov-85 12:55:48 EST
Article-I.D.: duke.6589
Posted: Thu Nov 14 12:55:48 1985
Date-Received: Sun, 17-Nov-85 07:10:03 EST
References: <1137@decwrl.UUCP> <109000011@ima.UUCP>
Reply-To: jvb@duke.UUCP (Jack V. Briner)
Organization: Duke University
Lines: 15

There are two types of Mortgage Insurance.  Make clear which one you are talking
about.  The first one is one that is beneficial for the mortgage company
and is frequently called PRIVATE MORTGAGE INSURANCE (PMI).  This is normally'
added to your monthly payment until your equity reaches 20%.  Be aware how
your mortgage company deals with this, they may not automatically cancel it.
The second kind, which is often offered via your mortgage company, is another
form of Universal Life Insurance.  (As you own more of your house, the
premiums should go down because the amount to pay off is less.  Although your
age has gone up, some argue.)  If you (or in some cases your spouse) dies, the
mortgage company is paid the balance of your loan.  I can see no advantage of
this over Universal Life or Term Insurance.  This insurance should be properly'
labelled CREDIT LIFE INSURANCE.  In the general case for CLI, I see no need
to have backup but you should have something to backup your home which may
be a large financial strain.  (Your car can always be returned to finance 
company).