Protect Your Home: Why Mortgage Protection Insurance is a Must-Have
Buying a home is a significant investment and an exciting milestone in anyone’s life, especially for first-time homeowners.
However, owning a home comes with financial responsibilities that can impact a family’s financial stability in the long run. A mortgage protection insurance policy protects your family’s financial future by providing a safety net in the event of an unexpected loss of income or death. In this blog, we will explore why a first-time homeowner with a family should strongly consider mortgage protection insurance.
What is Mortgage Protection Insurance?
In simple terms, mortgage protection insurance is a life insurance policy that pays off your mortgage if you die or become unable to work due to a disability. This is a type of security and peace-of-mind knowing that your family can continue living in the home without the burden of mortgage payments.
Why is Mortgage Protection important for home owners with families?
Protects your family’s home in case of unexpected loss of income:
Mortgage payments are often the biggest expense for most families. If the primary breadwinner of the family is insured and were to pass away or become disabled, it could put a significant financial strain on the family, making it difficult to make mortgage payments. In such cases, mortgage protection insurance can help ease the financial burden by covering the mortgage payments for a specified period or paying off the mortgage entirely. This means that your family can continue living in the home without having to worry about making monthly mortgage payments
Provides financial security to your family:
The sudden loss of a primary insured breadwinner can cause significant financial stress to a family. Mortgage protection insurance can help provide financial security to your family in the event of such a tragedy. The insurance payout can help your family pay off the mortgage, cover daily expenses, and maintain their lifestyle. In short, it can help prevent your family from facing a financial crisis during a difficult time.
Helps protect your family’s credit score:
If a family member were to pass away or become disabled, it could be challenging to keep up with the mortgage payments, and the missed payments could damage the family’s credit score. A damaged credit score can affect the family’s ability to get loans or credit cards in the future. Should the primary insured breadwinner no longer be able to make payments, mortgage protection insurance ensures that the mortgage payments are made and negative reporting to the credit bureau is avoided.
Provides peace-of-mind:
The peace of mind that comes with having mortgage protection insurance is priceless. Knowing that your family will be taken care of in the event of an unexpected loss of income or death can help reduce stress and anxiety. The insurance can help you sleep better at night, knowing that your family’s financial future is secure.
What are the different types?
There are three types of mortgage protection insurance: decreasing term, level term, and permanent insurance.
1) Decreasing term insurance
Decreasing term is a type of mortgage protection insurance where the payout decreases over time, reflecting the decreasing mortgage balance. This type of insurance is ideal for those who have a repayment mortgage, where the amount of the mortgage decreases over time as the payments are made.
2) Level term insurance
Level term is a type of mortgage protection insurance where the payout remains the same over time, regardless of the outstanding mortgage balance. This type of insurance is ideal for those who have an interest-only mortgage, where the mortgage balance remains the same over time, and the monthly payments only cover the interest.
3) Permanent insurance
Permanent Insurance policies will pay in the event of death for the insured’s entire life. For this reason, permanent life policies are typically more expensive, but they can be purchased in smaller increments. Oftentimes, smaller permanent life insurance is used to cover the mortgage for a period of time while the family adjusts to life without the breadwinner. These policies also build cash value so when the mortgage is paid off, the owner of the policy can surrender it and receive a refund of the cash value that accumulated over the time while the policy was active.
Choosing the right mortgage protection insurance policy can be challenging, but it is essential to ensure that you have the right coverage for your family’s needs. Here are some factors to consider when choosing a policy:
Coverage amount: The coverage amount should be enough to pay off the mortgage and cover other expenses, such as daily living expenses, children’s education, and other debts. It is essential to calculate the total amount of coverage that you will need to ensure that your family can maintain their lifestyle and financial stability.
Term of the policy: The term of the policy should align with the length of your mortgage, and the policy should remain in effect until the mortgage is paid off.
Premiums: The premiums of the policy should be affordable and within your budget. It is essential to compare the premiums of different policies to find the one that offers the best value for your money. Pivotal Insurance agents can assist you with determining which policy is best for you at the lowest cost.
Exclusions and limitations: It is crucial to read the fine print of the policy and understand any exclusions or limitations. For example, some policies may not cover certain medical conditions or pre-existing health issues.
Insurer reputation: It is essential to choose a reputable insurer with a good track record of paying out claims promptly. Research the insurer’s reputation and read customer reviews to ensure that you are choosing a reliable and trustworthy insurer. Pivotal agents will take the time to explain each carrier and their products.
In conclusion, buying a home is a significant investment, and it is essential to protect your family’s financial future by considering a mortgage protection insurance policy. The policy can provide a safety net in the event of an unexpected loss of income or death, ensuring that your family can continue living in the home without the burden of mortgage payments. It provides financial security, helps protect your family’s credit score, and provides peace of mind. When choosing a policy, consider factors such as the coverage amount, term of the policy, premiums, exclusions and limitations, and the insurer’s reputation.
Reach out to a Pivotal agent now who will help you chose the right policy, giving you peace-of-mind knowing that your family is financially protected. Call now!
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About Pivotal Life Insurance
Pivotal Life Insurance is a family owned, independent insurance agency that focuses on income protection and family security through Life Insurance products (Term Life, Whole Life, Final Expense), Mortgage Protection and Annuities. With a range of product offerings, we accommodate the varying needs of our clients through resources provided by the nation’s top rated carriers. Although we are headquartered in South Florida with a branch in Maryland, we service most of the United States as our agents are licensed throughout the country. Pivotal Life Insurance is one of the fastest-growing agencies and we pride ourselves in putting you, our customers, first.
Insurance Is Pivotal. Cherish what’s important.
For more information or if you’d like to join the Pivotal family, visit www.insuranceispivotal.com or call at 561-412-5500.