I have a large life policy which is assigned to my mortgage provider. The value of the policy exceeds my liability twice over.
I meet with an insurance broker today, to bring the value of my policy down, so I could have it at the same value as my mortgage.
Firstly, I could not rectify the policy without the say so of the bank and secondly the broker suggested I keep the life policy as is, as this would be a bargaining tool while dealing with the bank regarding my financial problems??
He suggested, that whilst I'm currently paying only a % of my mortgage, the capital would increase, hence ending up with a larger loan than what I started out with.
The policy is valued at double my mortgage, so to put it in a nut shell, if I were to kick the bucket, the bank would stand to clear off my debt plus some.
I am eager to drop the value of the policy as I am looking to make further cuts to my monthly expenditure but have been advised that this might not be such a good idea??
Does this make any sense?
I meet with an insurance broker today, to bring the value of my policy down, so I could have it at the same value as my mortgage.
Firstly, I could not rectify the policy without the say so of the bank and secondly the broker suggested I keep the life policy as is, as this would be a bargaining tool while dealing with the bank regarding my financial problems??
He suggested, that whilst I'm currently paying only a % of my mortgage, the capital would increase, hence ending up with a larger loan than what I started out with.
The policy is valued at double my mortgage, so to put it in a nut shell, if I were to kick the bucket, the bank would stand to clear off my debt plus some.
I am eager to drop the value of the policy as I am looking to make further cuts to my monthly expenditure but have been advised that this might not be such a good idea??
Does this make any sense?