Purchasing a home is an exciting event, and protecting your purchase with life insurance for mortgage protection is an important part of the process. Many different types of life insurance exist for mortgage protection, so it is imperative you are aware of the advantages and disadvantages of each. If you have purchased a home, the last thing you would want to happen is for your family to lose the home in the event of your death. This is a very real situation, and actually happens quite often. Through some simple life insurance planning you can make sure this doesn’t happen.
Your home is most likely your largest purchase, and your largest bill each month. Whether you have purchased your first home, or subsequent homes it is important to keep your life insurance up to date.
In the event of your death, your family would take a significant hit in your income and those bills you pay each month could become heavy burdens.
When your family income is cut in half, meeting all of the bills, including the mortgage may be challenging to pay off. A properly designed life insurance policy will make sure the house is paid off, and will give your family choices. This gives everyone peace of mind in knowing even in one of the hardest times of their life they will be able to keep a roof over their head.
When you are signing your paperwork with the lender, they will normally ask you if you would like to purchase mortgage life insurance. This is rarely your best option, because it is a declining face amount life insurance policy and normally costs the same or even more than a traditional life insurance policy.
What I refer to as a traditional life insurance policy is term life insurance. What we normally advise as life insurance for mortgage protection is matching the duration of the term policy to the duration of a mortgage. We also would be able to match your mortgage amount to the amount of the term life insurance policy.
For example, if you have a $250,000 30-year mortgage, we can then help you obtain a $250,000 30-year term life insurance policy. If you were to purchase what is actually called “mortgage insurance” it would cost more, and the value of the policy would decrease each month. Term life insurance is, in my opinion, the best protector of mortgages. If you pass away during the 30 year period, your family will receive the $250,000 and will be able to completely pay the mortgage off if they choose to. They may also have extra money which they can use to grieve properly.
Qualifying for life insurance for mortgage protection is no different than any other type of term life insurance. The first step is to determine your face amount and duration which is pretty simple using the steps I outlined above. Since this is going to be a policy you hold on to for the next 20-30 years it is important you work with an independent life insurance agent who can get you the best price for your policy.
When you obtain a quote through our online quoter it searches over 50 life insurance companies to find you the best price available in the market. The application process is simple and can take less than 5 minutes to complete. Now you are on your way to protecting your home purchase for you and your family. If you have any questions I didn’t answer regarding life insurance for mortgage protection, we can always be reached at 843-742-5981.