Getting a mortgage is a big milestone in anyone’s life. You’ve finally gotten onto the property ladder and now you can start building up your home. This can take years and it can give the place that you live a lot of sentimental value. Protecting this place can make a world of difference to you and your family.
This article will look at some of the reasons why it could make sense to get life insurance if you have a mortgage. Don’t worry though we’ll make the process simple and straightforward. After all, getting this type of insurance could make the difference to you and your loved ones.
Do you need life insurance to get a mortgage?
This is a pretty common question among people who are looking at getting a mortgage. There may be plenty of hoops to jump through when getting a mortgage. The last thing you might want to have a look at is life insurance. Getting life insurance when you are getting a mortgage isn’t compulsory, but lenders could require you to have a policy in place in order to get the money. Besides all of this though, there are plenty of reasons why you might get it.
A good way to think of this type of life insurance is that it could be good for anyone with large financial commitments. While it’s true that a mortgage could be the largest financial commitment you have, it could be good to have cover for other large loans. Mortgage life insurance from Choozi doesn’t just have to be used for a mortgage, you could even choose to get more cover than your outstanding mortgage amount to cover other loans for example.
What is Mortgage Life Insurance?
This is a type of life insurance that is set up to specifically help your loved ones cover your outstanding mortgage or any large loan if you pass away. You start off by selecting a payout amount which is around the same amount as the outstanding mortgage/loan you have. Over the duration of the policy, this benefit amount will decrease. This is to help the fact that the mortgage/loan will decrease over time as it is paid back.
With mortgage life insurance the benefit that you select is up to you. You have the option to select more than the mortgage/loan amount but it may mean that the monthly premium you have to pay will be higher. Once this insurance is set up if you pass away while you are covered your mortgage or any other financial commitment will be paid off.
What are the benefits of having Mortgage Life Insurance?
When you get a mortgage you could spend years building the house you’ve bought into a home. If you were to die would your family be able to replace your income? Unfortunately, the bills will keep coming especially when it comes to a mortgage. One of the benefits of getting mortgage life insurance is worrying less about this fact. Part of getting this kind of insurance sorted out is about getting peace of mind. During the stressful time of someone passing away your family could be safe in the knowledge that large costs for example relating to the house are looked after.
Can you get Joint Mortgage Life Insurance?
One possible option if you are paying for a mortgage with your partner is to take out a joint life insurance policy. Even if the other partner is not the primary breadwinner it could make sense to have that extra bit of cover. Unfortunately, funeral and hospital costs are something that everyone will encounter at some point no matter who they are. These kinds of costs, even while you are working, can be a lot to take on at short notice.
With our insurers, a joint life insurance policy would cover you and your partner if you were to pass away. The policy is designed to pay out on the death of the first life insured only. If one or the other person insured was to pass away during the term, the beneficiaries will receive a lump sum payout. There will be one monthly premium to pay for this policy. This can often be a cheaper alternative than having two separate life insurance policies.
What are some of the disadvantages of Mortgage Life Insurance?
While it might sound pretty ideal for many people there are some things that you should bear in mind. As we have mentioned before the amount that you will be paid can be for any large financial commitment you have. This doesn’t provide cover if you were to fall ill. The treatment and recovery time for an illness can be both expensive and leave you unable to work. There are things that need to be taken care of, especially if you are the primary breadwinner. These things range from groceries to electricity bills. Taking care of your mortgage is important but there are other things too.
One way of getting some extra protection is by securing critical illness cover as well. With this cover, you can make sure that bills are covered even if you suffered from a critical illness and were unable to work. During the application process for mortgage life insurance, you can select it as an option. If you were to make a claim on critical illness cover during the term and didn’t pass away you would still be covered under the mortgage life insurance policy.
There are also certain risks that are involved with every insurer. It’s important to make sure that you read up on the information that each insurer gives. Each of them will have their own risks and things to consider. Being aware of these risks could help you avoid difficulties further down the line.
Get the protection your home deserves
You’ve spent the time finding the right place to call home. It only makes sense that you would get the kind of protection that it deserves. While it might not be for absolutely everyone, Mortgage Life Insurance could potentially be a big help for a lot of people. It might not be a legal requirement but it can offer you peace of mind.