How Life Insurance Can Cover Your Mortgage Balance

How Life Insurance Can Cover Your Mortgage Balance



How Life Insurance Can Cover Your Mortgage Balance
Discussing the​ need for life insurance is​ never a​ pleasant topic,​ and certainly combined with talk of​ mortgage payments,​ it​ can be downright distasteful .​
But it​ is​ your responsibility as​ the​ principle breadwinner in​ your home to​ consider what might happen if​ you​ or​ your spouse were to​ perish .​
Would your spouse be able to​ meet the​ most basic needs of​ food and shelter? While the​ money necessary to​ pay for basic amenities like food and transportation are attainable through a​ single income source,​ most families simply cannot afford to​ meet their most basic requirement,​ the​ mortgage payment,​ without the​ income from both spouses.
How it​ Works
If you​ are in​ this situation,​ it​ is​ important to​ take the​ necessary precautions in​ case you​ or​ your spouse dies unexpectedly .​
While saving enough to​ cover your mortgage is​ certainly an​ ideal solution,​ it​ is​ largely unfeasible for most contemporary families .​
as​ a​ result,​ individuals often opt for mortgage protection life insurance policies .​
These policies are designed specifically to​ meet the​ needs of​ your home mortgage payment in​ the​ event that you​ or​ your spouse dies .​

The idea behind mortgage protection life insurance is​ simple: you​ pay a​ monthly premium in​ exchange for which the​ insurance company agrees to​ pay off the​ rest of​ your mortgage should you​ die .​

Pricing
Pricing for mortgage protection life insurance policies parallels that of​ traditional life insurance price criteria .​
For example,​ if​ you​ smoke your rates will be higher,​ just as​ if​ you​ are an​ older individual .​
But certainly the​ most determinative factor in​ your price will be the​ amount of​ coverage you​ need .​
the​ more you​ owe on​ your home,​ the​ more insurance you​ will need to​ pay it​ off,​ which of​ course means the​ more expensive the​ insurance premium will be .​
Alternatives to​ Consider
While mortgage protection life insurance will cover your mortgage payment,​ as​ all home owners know,​ this is​ only part of​ the​ cost of​ owning a​ home .​
in​ addition there are taxes and repairs to​ prepare for .​
For a​ family that has lost a​ breadwinner,​ making these types of​ allocations can be difficult .​
as​ a​ result,​ many individuals opt for coverage which goes beyond just mortgage protection and instead provides payments sufficient to​ cover all the​ expenses associated with owning a​ home .​
This type of​ insurance often comes in​ the​ form of​ a​ term life policy which is​ for an​ amount which exceeds the​ price of​ your home .​
Of course,​ this extra coverage comes with a​ price .​
But with this coverage also comes quite a​ bit more flexibility .​
Under a​ term life policy your family is​ not bound to​ pay off the​ house with the​ money they receive,​ but can instead use it​ in​ whatever manner they feel most compelled to​ .​
This can be especially helpful if​ there are other medical costs to​ consider or​ if​ you​ have children approaching college age .​

Life insurance is​ not a​ pleasant concept to​ consider because it​ requires that we think about the​ potential for our own demise and the​ resulting consequences of​ our death .​
It is​ vital,​ however,​ that as​ individuals who are responsible for the​ financial support of​ others,​ we consider these difficult questions and decide whether a​ life insurance policy is​ the​ best solution for us.




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