It's never fun to talk about the need for life insurance, and when you add in talk of mortgage payments, it can be downright unpleasant. But as the main breadwinner in your family, it is your job to think about what would happen if you or your spouse died. Could your partner meet his or her most basic needs, like food and a place to live? Even though a single income can cover basic needs like food and transportation, most families can't pay their mortgage without the income from both spouses.
How it Does It
If you are in this situation, you should take the right steps in case either you or your spouse dies suddenly. Even though saving enough money to pay off your mortgage is the best solution, most modern families can't do it. People often choose mortgage protection life insurance policies because of this. These policies are made to pay your mortgage if you or your spouse dies.
Mortgage protection life insurance is based on a simple idea: if you pay a monthly premium, the insurance company agrees to pay off the rest of your mortgage if you die.
Pricing
The price of mortgage protection life insurance is the same as the price of regular life insurance. For example, if you smoke or are an older person, your rates will be higher. But the amount of coverage you need will definitely be the biggest factor in your price. The more you owe on your home, the more insurance you will need to pay it off, which means your insurance premium will be more expensive.
Options to Think About
Mortgage protection life insurance will cover your mortgage payment, but as all homeowners know, this is only one of the costs of owning a home. There are also taxes and repairs that need to be planned for. When a family has lost a main source of income, it can be hard to decide how to divide up the money. Because of this, many people choose insurance that covers more than just their mortgage and gives them enough money to cover all the costs that come with owning a home. Most of the time, this kind of insurance comes in the form of a term life policy for a larger amount than the cost of your home. Of course, there is a cost for this extra coverage. But this kind of coverage also gives you a lot more freedom. With a term life policy, your family doesn't have to pay off the house with the money they get. Instead, they can use the money however they want. This can help a lot if you have other medical bills to pay or if your kids are getting close to college age.
Life insurance is not a pleasant thing to think about because it makes us think about the possibility of our own deaths and what would happen if we did die. But as people who are financially responsible for other people, it is important that we think about these hard questions and decide if a life insurance policy is the best solution for us.
