Life insurance considerations
when buying or refinancing a home
What Considerations should you consider when buying or refinancing a home
Buying a new house is an exciting time. Refinancing a property may have put a bunch of cash in your pocket to accomplish some of your other financial goals.
Let’s Put a Plan Together
Contact a Life Insurance Specialist at Decision Tree Financial
If you didn’t get your mortgage from us (you should have but that is ok, hopefully next time), then the odds are you will be receiving a whole lot of requests from excited life insurance agents eager to sell you a life insurance policy to pay off your mortgage (Fill them out and send them in if you want to CONSTANTLY receive calls and have your information repeatedly to new agents.) These agents get your information from public records because they know you understand the importance of having a plan in place to pay off your mortgage if anything were to happen to you. We understand that you are free to work with anyone you want but we believe we have the best solution:
Let Decision Tree Financial help you develop a plan that gets you the right coverage at the lowest overall cost.
To help you make the best decision about your mortgage protection plan, here are some considerations you will want to make before buying life insurance to pay off your mortgage after buying or refinancing your home:
Is paying off your mortgage the only financial goal you have?– It may be, and that is ok. When you are looking at adding an insurance coverage it is a good time to look at your overall insurance plan.
You might find there are policies you forgot about providing little value but costing you money. That money can be reallocated giving you better coverage without changing your budget. Who doesn’t want better insurance without costing more? Use our life insurance calculator to explore what life insurance coverage could do for those you want to protect.
There is a section on the calculator that allows you to put your mortgage balance as well as other potential goals such as provide money to your spouse or children and even pay the taxes on the property for as many years as you would like. These will be your numbers and you can play with them as much as you want.
Are you insurable – Let’s face it, insurance companies don’t give new insurance policies to people they believe will file a claim soon. If you have a pre-existing health condition, this may make getting life insurance mortgage life insurance difficult if not impossible.
However, there are policies that you may be able to qualify that will cover you if you were to pass away from an accident that are very affordable.
What if you are sick or injured but don’t die?– Having a mortgage is a pretty big commitment. For most people, a new mortgage means there are about 10,950 days where there will be payment obligation hanging over their head. That’s not forever, but it’s a mighty long time. You will want to consider a plan that can provide money to you if you become sick or disabled.
There are life insurance mortgage protection plans that provide other benefits such as lump sum payments to pay off your mortgage if you have cancer, a heart attach or stroke. Others could pay monthly incomes that can be used to pay your monthly mortgage payment if you become disabled.
Having a mortgage means you will want to have the cash flow available to always cover your obligations so that you don’t risk losing your investment to foreclosure.
Check out insurance rates – There was a time when mortgage insurance protection was accomplished using a life insurance policy that decreased coverage as the loan balance decreased.
Today, the insurance industry generally uses level term coverage exclusively. That fact doesn’t mean you can’t decrease coverage over time and save yourself some money by planning a little. Use our free, no obligation and easy to use life insurance quote engine to find prices from actual life insurance carriers in your state. Look at splitting your coverage between 2 or more different length term life insurance policies.
For example, if your mortgage is $250,000 – look at the premium of a 30 -year term for all of it and then compare that to the premium of a 15 year term and a 30-year term for $125,000 each. Another idea is to use a 20 or 30 year Return of Premium term life insurance policy. Return of Premium term life insurance requires a little more premium but if you survive the length of the term, you will receive 100% of the money you paid into the policy.
Make a life insurance plan with a Decision Tree Financial insurance advisor We love educated shoppers and we know you will want to know which companies will give you the best policy at the best rate. The quotes you will receive on are life insurance quote tool are actual prices but there are variables you will want to consider.
For example, do the policies have any additional benefits, how do life insurance companies underwrite and assign rate classes and do the policies have an option to continue coverage after their expiration date. We are here to help you make the best decisions about purchasing life insurance for your family.