In today’s post, I’ll try and answer two more questions that were sent in to the Personal Finance Clinic. You may also want to check out Triaging My Way to Financial Success and Money Gardener for more questions that were sent in to the clinic.
We currently have mortgage life insurance, but what I’ve been reading lately leads me to believe that it may not be the smartest decision. Are we better adding the value of our mortgage onto each spouse’s life insurance policy and canceling the mortgage life insurance?
The drawbacks of Mortgage Life Insurance were pointed out in an earlier post (See Mortgage Insurance versus Life Insurance). I think it makes sense to first obtain or increase an adequate amount of term-life insurance and after the policies come through, cancel the mortgage life insurance. A chat with a licensed insurance broker should clarify matters.
When buying a dividend stock or even a corporate bond, is it best to wait till a little before the dividend is paid out to buy the stock?
The short answer is no. This article on Investopedia explains terms such as declaration date, ex-dividend date, record date and payment date. Unfortunately, you cannot make more money by purchasing a stock before the ex-dividend date. The stock price will usually drop by roughly the amount of dividend payment on the ex-dividend date.