If you go to work daily to provide your family with a nice home and a future, you know you make sacrifices. As one client shared with us, "Paying a mortgage involves sacrifice." When one spouse is away at work, the children and the other spouse sacrifice by the absence of the working spouse. Where both spouses work, the children sacrifice doubly.
What if you weren't around, permanently? When death leaves an unfunded mortgage and requires a move, stress is born by children uprooted from school and neighborhood friends. It is born by a spouse who, on top of the relentless stress of modern life and the shocking stress of losing a partner and best friend, may have to sell the family home in a buyer's market.
When everyone lives, mutual sacrifices tend to balance out and drift away over time. However, suddenly, if you were to die today, one way to lessen some of the sacrifice your family is making is to provide them with a debt free home. Homeowners traditionally use one of two types of protection in such cases. One is life insurance to pay off a mortgage. The other is an actual mortgage protection policy.
One type of mortgage protection policy reduces its death benefit as your mortgage is reduced. Though you are aging, your premiums remain level because the death benefit is decreasing with your mortgage.
One drawback to such protection with the lender as beneficiary is the death benefit goes to the lender. Maybe interest rates are hovering at a rate where it would be better to invest the money in safe, U.S. Government securities?
This result can be avoided by using term life insurance to retire a mortgage. With such policies you can name a non-lender beneficiary who can use the proceeds in the most financially suitable way.
Drawbacks occur here too. One is when mortgage indebtedness is less than $100,000. Few term life policies offer a minimum death benefit below $100,000, and below this amount almost none offer good value in the cost to coverage ratio.
Please allow one of our qualified mortgage/life insurance specialists to assist you in obtaining the information you want so you can make an informed decision. With one free phone call or an e-mail you can take the first step toward leaving a clear title to your home.