Buying a home is quite possibly the most exciting purchase you will ever make, but with this thrilling purchase comes great responsibility. Sproutt insurance advisors recommend that anyone who buys a house should also get life insurance, because if something happens to you and your mortgage is not paid off, that debt can pass on to your loved ones. Worse, the house can be repossessed. Since neither of these options is what you would want for your family, having life insurance is a way to make sure they don’t happen.
How Does Life Insurance Affect a Mortgaged Home
It’s important for homeowners to understand the role that life insurance plays in protecting a home since this is a key factor in identifying the life insurance coverage that’s most suitable. The death benefit of a life insurance policy can be used to pay off outstanding debts so that beneficiaries don’t need to make mortgage payments or sell the property.
How Much Coverage Do You Need?
If you have a mortgage, it’s not difficult to estimate how much life insurance you need. Choosing coverage that will cover the outstanding balance is a good rule of thumb. If you want your loved ones to have a little extra, you can add that on. But bear in mind that the higher the coverage, the higher the premiums.
Which Kind of Life Insurance Do You Need?
Once you determine how much coverage you need, you can decide which type of life insurance you need. There are 2 main types: Traditional and no-exam life insurance. Both come in the forms of whole and term.
Whole life insurance lasts a person’s entire life, whereas term ends after a pre-selected duration. Term is the more popular choice for homeowners who get life insurance to cover a mortgage, since once the mortgage is paid off they feel they don’t need it. The correct term to choose is however many years remain to pay off the balance of your mortgage.
The main thing to consider is whether you want a traditional term policy or a no exam term policy. The benefits of a no exam policy are that you can be approved quickly, the entire process can be done online, and you can skip the medical exam. The benefits of a traditional policy are that you can get coverage for over $1 million and that premiums tend to be less expensive than no exam. However, people who are in good health can get good rates for either type, so if you don’t have time to go to the doctor or need life insurance quickly, no exam is a good choice. If you’re still not sure, you can get a free quote here and compare rates for both types of policies.
Getting the Right Life Insurance for You and Your Home
While life insurance can be an added expense on top of a mortgage, the benefits of having it certainly outweigh the risks of not having it. The most important thing is to choose a policy that is best for you, whether it’s a traditional term policy of a no exam policy. If you want to go the route of whole life insurance, that’s fine too, and the coverage it offers will go much further than paying off a mortgage.
Once you decide what kind of policy you want and sign on the dotted line, you can breathe a sigh of relief and enjoy the peace of mind that comes from knowing your loved ones will be provided for.
