domingo, 22 de julio de 2012

Possible Unknowns; Protecting Your Home

What would happen if something unexpected happened to you? Who would take care of the mortgage? 
You have worked hard to purchase your home. You qualified for the best mortgage rate because of your excellent credit rating, income level and financial history. But what if the unexpected happened?
Besides the emotional stress, a surviving spouse may experience a significant decrease in household income that could lead to foreclosure. That’s why many banks and mortgage companies encourage homeowners to purchase mortgage life insurance. Essentially, you purchase mortgage life insurance so that in the event of a sudden death, funds are available to meet any outstanding mortgage balance.
Image of a person on a wheelchair
Who will take care of the mortgage?
Perhaps you already knew this, but were you aware that the type of insurance you purchase can greatly affect your surviving family members’ options? Let’s look at some options.
You could buy life insurance from a either the lender or an insurance company. When you purchase insurance from a bank or mortgage company, in most cases you pay the premiums but the lender receives the proceeds at the insured’s death, and your family receives the deed to the house.
However, sometimes surviving families may not want to keep their homes. They may want to move closer to other family members or relocate for different reasons like a new job.
This is when personally owned life insurance offers more choices and control because the surviving beneficiaries, not the lender, receives the insurance proceeds. They can then decide what to do with the money; whether to pay off the mortgage in one lump sum, to continue to pay it down periodically, or to sell the house.
Besides, personally owned life insurance is portable, which means, if you move in a few years, you won’t have to replace your insurance, which could be costly. Remember that, with most insurance policies where part of the premium is set aside for growth, the cash value is almost minuscule before ten years. Buying a policy that is not portable would be too costly as time is not as readily available as money could be.
Furthermore, even after the mortgage is paid, personally owned life insurance can provide other valuable benefits.
Image of a happy family in front of their new home
Protecting your new home and your family's future
Whether you decide to purchase mortgage life insurance through a bank or insurance agent, the key is to be prepared for the possible unknowns. There is a real chance that someday one person will be completely responsible for your family’s finances. Taking the necessary steps today can ensure your family’s financial future tomorrow.


No hay comentarios.:

Publicar un comentario