Buying a home is one of the biggest purchases in a lifetime. After making this HUGE decision to pull the trigger on a home, you can take pride in the security, comfort and equity it provides you and your family.
Unfortunately, most people don’t consider how to protect this asset in the event you or your spouse/partner dies. Today, it is very common for both adults in a household to pay for a mortgage; imagine the difficulty to maintain payments with only one income.
Mortgage protection, also known as Mortgage Insurance, is the safety net that allows your family the opportunity to stay in your home and avoid worrying about following questions.
1. If your surviving spouse can’t afford the mortgage payments, where will the remaining family live?
2. What will happen to the house?
3. What if your death occurs in a down market and your loved ones are forced to sell at a reduced price? What if this reduced price is less than you owe the bank?
The greatest thing about mortgage insurance is that you don’t need to purchase an amount that would pay off your entire mortgage. You choose the amount of insurance you want. For example, let’s say a family has a $300,000 mortgage and their monthly payments are $2500. Both adults purchase $100,000 in mortgage protection. If one were to pass away, the other spouse would receive $100,000. This death benefit would be enough to cover 40 months of mortgage payments ($100,000/$2500 = 40 months). During a very emotional, difficult time like this, Mortgage Protection provides the surviving spouse the peace of mind and time to make important decisions (i.e. keep or sell the house, pay off car/school loans, credit cards, monthly utilities, etc.).
There are several different Mortgage Protection options to ensure your home and family is taken care of (see below).
Level Term Life Insurance
Term policies offer the most coverage for the least cost. This policy provides protection for specified periods of time; typically, the terms are identified in 5, 10, 20 or 30 year policies. The monthly premiums and death benefit are fixed for the duration of the policy.
Decreasing Term Life Insurance
This policy provides a specified period of coverage (usually between 10-30 years). As the policy matures, the death benefit decreases.
Permanent Insurance
A Whole Life or Universal Life policy builds cash value, is tax-deferred and can stay in effect until you are 100 years old (assuming you pay your premiums). Some permanent life policies can even extend beyond your 100th birthday.
Until you deliver a death benefit check to a surviving spouse, it’s impossible to comprehend the power of Mortgage Protection. If the unthinkable happens, providing your loved ones with enough Mortgage Insurance is essential for every home owner.
We insure our cars, homes and valuable jewelry…why wouldn’t we insure our most important asset (our family)?
So, the question we have for you is….will you leave your family a deed or a debt? You decide.
