Buying a Home brings many responsibilities in addition to providing the income to cover the mortgage, and maintain the residence. Along with your Homeowners insurance you also need to consider having Mortgage insurance. Some Mortgage insurance is called PMI (Private Mortgage insurance) which the lender tacks on to the loan as an additional fee (if you put less than 20% down). This generally protects the lenders from the loan defaulting.
But Mortgage insurance can also be provided by purchasing a Life Insurance policy on one, or both, of the spouses in the household. This protects the families financial future should something happen to either of you? If a working spouse were to pass away the financial hardship that would put on the household will only compound the emotional hardship. At the very least, Life insurance gives the family time. time to readjust to the loss of a loved one, and reassess their financial situation? Ideally it would provide sufficent income to maintain their lifestyle. But, while many families have morbidly joked about being worth more dead than alive, the ultimate factor in calculating sufficient Life Insurance is its affordability.
A non-working spouse’s economic contribution to the household has been calculated to be $30,000 a year. That is what a basic housecleaner, errand runner, baby sitter would cost conservatively. To replace that you need to have enough coverage to conservatively generate that amount of income. At a 5% return that would mean $600,000 in Life insurance. This is easiest to obtain with a 20 Year Term policy which would cover this expense for the time the children are young and the mortgage is large. And a multi line carrier should provide discounts on your personal lines which will also help defray the cost! For a free quote contact us on our website: http://www.farmersagent.com/ctrowbridge
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