We don’t often like to talk about death, but it happens. Which is why every homeowner with a mortgage should have an active life insurance policy.
Life insurance policies protect your home and your legacy in the event of your death.
They’re also cheap to own.
Homeowners in their 20s or 30s can reasonably expect to get a $500,000 term life insurance policy at a cost of roughly $25 per month.
This is less expensive than the cost of auto insurance or health insurance because people make fewer life insurance claims overall — especially young people.
It’s estimated that fewer than two percent of term life insurance policies are ever paid out, so use this statistic to your advantage. It’s why you can get a term life policy inexpensively.
- A $1,000,000 policy might cost near $35 per month
- A $2,000,000 policy might cost near $65 per month
- A $3,000,000 policy might cost near $100 per month
And, maybe you don’t want the maximum coverage available to you, but it’s still smart to have life insurance coverage that’s at least equal to the size of your mortgage.
This way, if you passed, your loved ones who receive your life insurance payout could use it pay off your mortgage, and retire your outstanding debt.
Otherwise, your home could go to foreclosure because your debts are still due, even if you die.
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When your lender says, “you have to act quickly” is not some high-pressure sales tactic meant to make you feel fear. It’s the truth.