Buying a home takes months of careful preparation and research, shopping around for a mortgage, pricing houses in the area, and meeting with agents and lawyers. After all this effort, when you finally find the property of your dreams, you may feel the urge to jump in and sign an agreement. But have you considered how your family will continue to cover mortgage payments should you pass away?
Life insurance is a vital aspect of homeownership, and those who have a good term life insurance policy may mistakenly believe that they have the potential funds needed in the event of a death. However, housing is a major part of one’s budget; though a life insurance policy may provide money to cover some payments as the family works through the grieving process, it’s important to think of life for them far down the road. For many people, this means investing in a term life insurance policy as well as a mortgage insurance policy.
These two types of insurance complement each other well. For example, though term life insurance policies are generally cheaper, factors such as poor health will negatively affect the term rate. A mortgage insurance policy — which does not account for health-related factors — may be needed in addition to a term life insurance policy to provide ultimate peace of mind. Are you certain that a term life insurance will take care of all your financial needs? Take this quiz to test your knowledge about the differences between these policy types and reconsider which will provide the comprehensive coverage that you need.
Working on paying off your mortgage early will also provide some relief to those left behind should an unforeseen event take your life unexpectedly. With all things finance and insurance seek independent advice.