The homes we live in are big investments. Often they are the biggest investment we make and inevitably, whether purchasing a home for the first time or refinancing, someone has suggested you purchase mortgage insurance – life insurance on the home owners, in the event that either of you die, then your mortgage balance is paid off.
There are other options you need to know about that have proven to be incredibly beneficial to our clients and will be for you as well.
I remember 15 years ago when my husband and I bought our first home. We really debated the need for insurance. We certainly didn’t need the extra expense of the premium each month, and the mortgage seemed manageable, we were young, healthy, and both employed. We figured we would pay the mortgage off before anything happened to either of us. Then we had our first child and things changed. We wanted the security of knowing life would continue without hardship if one or both of us passed away. We put a term life insurance policy in place. It was affordable and renews every 10 years.
When the policy came up for renewal last year I reviewed our insurance needs and determined our needs have changed and we need more. We had another child, we bought a bigger house, and our incomes have changed significantly. Fortunately, we already had this term policy in place because my husband now has Rheumatoid arthritis and is considered an underwriting nightmare. His chronic condition and the meds he takes to control its progression make it difficult and expensive to insure him now. Even though he plays hockey, is active and in general good health, he is now in a much higher risk category. We are so fortunate to have the original term policy in place because we will always at least have this.
You can never underestimate the value of continued insurability. Everyone wants insurance when they need it the most, but by then, they can’t get it. We see this all the time in our practice.
A client who called recently commented on how grateful she was to have the life insurance policy we set up for her. Shortly after it was put in place she found out she had cancer. A devastating experience for anyone, particularly for a young woman with a mortgage and dependents. No longer insurable, her existing policy is now a huge benefit offering her and her family some sense of security. She commented that she can’t imagine what she would do now if she hadn’t had it and is grateful that we recommended we assist her in getting her own life insurance policy rather than having mortgage insurance through the bank. Had she not done that, when her mortgage renewed recently, she would no longer be eligible for their insurance. No one can take her own life insurance policy away from her, once it is in place.
As a consumer, it’s always wise to know what you are buying and understand how it works. Let’s face it, we all want the best value for the money we spend.
There are many more benefits to having an Advisor or Planner work with you to get your own insurance policy in place, give us or them a call so we can review those with you and show you how you can actually save money through insurance.
Submitted by: Katherine Davidson
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