Is it better to get a mortgage insurance or term insurance to cover the loan balance of your property?

We need to conduct long-term financial planning in order to determine which type of term insurance policies suit your needs better. Generally, a mortgage term insurance policy is a decreasing term insurance policy whereas a typical term insurance policy is a level term insurance policy.

More Details: Types of Term Insurance Policies in Singapore

Accordingly, if the sole purpose of the insurance policy is to cover your mortgage and this is your last house, then a decreasing term insurance may be a suitable option.

On the other hand, if you intend to move to another property, or the insurance policy is intended to serve multiple purposes, then a level term insurance policy may become the better option. Additionally, some plans allow you to reduce your coverage over time. (Thus, this acts in similar fashion to a decreasing term insurance policy.)

To conclude, we need to know you in order to know which is a better choice for you. This is because there isn't a one-size-fits-all answer in financial planning.

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