Protecting Your Home From Sudden Death
Consider mortgage protection insurance. Have you ever given it any thought? Do you think it would be useful? Do you know how it works? Are you aware of the many options you have as far as the types of mortgage protection policies available?
Perhaps the largest investment you will make in your lifetime is the purchase of a house. In many a case this is where you will live for the rest of your life. You insure your house against any natural disaster that may befall it. You also insure it against fire.
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Most people take out a mortgage when they buy a house. They put down a small down payment and then make monthly payments to the bank or mortgage company that came up with the balance of the money to purchase the house. This is now your home. I am certain you would want your loved ones to own this home upon your death…
You want to leave an asset and not a liability. You need mortgage protection life insurance.
When most people think of protecting the mortgage they think of decreasing term life insurance. This is really the best way to go. The decreasing term policy was designed especially for this purpose and is the least expensive of the choices available.
The premium of the decreasing term policy remains level for the duration but the death benefit decreases with the balance owed on your mortgage…or close to it. The aim is to leave a home free and clear to your family.
There are many other types of life insurance policies that are used for mortgage protection. Some people use the return of premium term policy or even the whole life policy to cover the mortgage. The death benefits of these policies remain level throughout…
The rationale is that if the owner of the policy does not die during the mortgage period the homeowner would get back all the premiums paid for the mortgage protection policy. In the case of the whole life policy the cash value of the policy can be used somewhere down the line to pay off the balance owed during the lifetime of the homeowner.
Now that you have taken care of your mortgage in the event of your death let us also consider mortgage protection in the event of disability. Did you know that most people will become disabled at least 5 times during their lifetime? Many people are also only a few months away from total financial disaster.
If you become disabled a insurance policy designed to replace your income would be quite helpful. You can buy your disability mortgage protection insurance policy with an elimination period of one month, three months, six months, a year or two years. The longer the elimination period the lower the premium cost. As most people only have sufficient reserves to last a minimum of 3 or 6 months the policies with the shorter elimination periods are more often chosen.
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