Common pitfalls to avoid when selecting your coverage limits
Selecting the right coverage limit for your mortgage protection plan requires a delicate balance, yet many homeowners fall into the trap of over-insuring or under-insuring their liabilities. The most frequent mistake is matching the policy limit solely to the initial principal balance of the mortgage without accounting for how that balance decreases over time. Purchasing a flat, non-decreasing term policy that exceeds your actual liability means you are paying unnecessarily high premiums for coverage you do not need in the later