Do I really need life insurance for a mortgage?
Legally you are not obliged to take out life insurance for a mortgage. However, some lenders do consider it as a precondition for allowing you to borrow money.
Well, for a vast majority of homeowners it makes financial sense to have protection in place. A mortgage on a property is likely to be the biggest debt of your life that you would leave behind should something unprecedented happen. Sadly, these things do happen and as exciting as it can be to own a property, it certainly is not an exciting debt to be left should the unexpected happen. Having a policy in place to protect that debt is the greatest peace of mind you can invest in, not just for yourself, but for anyone who shares your life with you.
Do you have any dependents, people who rely on you to help put a roof over their head?
It’s not nice to think about, but it is a reality with house prices soaring many have now accumulated a larger sized debt.
Ask yourself…if you have a partner, and / or children how would they afford to make the repayments without your financial input? Taking out an insurance that can cover you for all eventualities can be considered an important expenditure, in order to make sure those you love the most are protected.
Buying a home as a couple…
When buying a home as a couple it is important to factor in that you rely on two incomes to pay the mortgage. If you or your partner were to get sick, have an accident or dare we say it die…would one of you alone be able to make the repayments?
Employers and protection
Employers will cover you for a length and percentage of pay in many cases when it comes to illness, or accident cover. However, be aware that the time is limited, and the pay amount may be reduced. If you have a terminal illness and you have no other insurance in place this can have serious implications on being able to keep up your mortgage repayments.
Life insurance can protect your family by paying a cash lump sum if you die during the length of the policy taken. This could be put toward paying the remaining balance of your mortgage. The money can be used to clear any outstanding debts, meaning that your family could live in the family home, and not have to worry about paying the mortgage, as well as coping with the consequences of deep loss.
Life Insurance as a Landlord
As an investor, or a homeowner looking to rent it out it may be worth looking at life insurance.
Life insurance can help you cover the remaining cost of the balance should you pass. You can increase your life insurance cover to account for the higher mortgage liability should you wish to refinance your portfolio. Life insurance however is not the same as Landlord insurance which refers to enhanced cover for buildings and contents.
What if you do not have a mortgage…do you I really need life insurance?
It is true that renters are less likely to take out life insurance…however if you think about the impact of the loss of your salary if you were not around…would this impact loved ones? Would they be able to afford to rent in your absence…if you got sick…had an accident…or died? Think about the cost of household bills…childcare costs if you have kids…
The reality… all insurance that protects your life and the life of others is worth considering
Your health is your greatest wealth, and in truth your life and how it impacts others your greatest asset…
Contact a member of the team today to receive a guide on how you can build your own Protection Portfolio, designed to suit your needs and lifestyle.