Modern families consider the home as their most valuable asset. Unfortunately, it is also the familys largest financial responsibility especially if it is still under mortgage. It is for this reason that you may want to consider getting an insurance to help cover any event that might negatively impact your ability to pay for your mortgage. So what insurance options do you have that can go with your mortgage?
Life Insurance
You might not believe it but your life insurance can be an invaluable tool to go with your mortgage. The premise is simple enough. If you die while the insurance policy is in effect, then your remaining family will no longer have to worry about paying your mortgage since this is already covered by your insurance policy. You can either choose term life insurance or a mortgage life insurance. The only difference here is the beneficiary of the policy.
In term life insurance, you get to choose who among your family members will be the recipient of the policy proceeds in the event that you die. The problem here, of course, is that its up to this family member how he or she intends to use the proceeds. He can continue to pay the mortgage or totally disregard it. On the other hand, a mortgage life insurance names your lender as the beneficiary so youll know that the proceeds of your insurance policy will go to the payment of the remaining balance in your mortgage.
Buildings Insurance
This is a compulsory type of insurance that goes with home mortgages. It is typically used in situations where your home got damaged because of certain circumstances such as flooding or fire. If you dont have this type of insurance, you will still be paying your mortgage while also shouldering the expenses needed for the repair of your home.
Income Protection Policy
There will always be instances when your capacity to pay can be compromised. As such, an income protection policy should help you retain a certain percentage of your income during such times that you are unemployed. You can set up a policy that will pay you a certain percentage based on your income or a set monthly figure.
Critical Illness Policy
Similar to an income protection policy, but more specific to a critical health condition that leaves you incapacitated and unable to work, a critical illness policy can also help ensure the security of your mortgage.
Getting the right insurance can help protect your investment. It can also help guarantee that your family will continue to enjoy the home you got for them.