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Life insurance for homeowners is a way to help protect the financial investment you make when you purchase a home if something unforeseen happens to you. The amount you put into your home is substantial. Beyond the listed price, there are closing costs, inspections, and taxes. When your family relocates to your new home, movers have to be hired, household items have to be purchased, and utilities have to be set up. Depending on your choice of home, you may also need to pay for repairs or renovations before (or shortly after) you move in. It’s a lot to think about, so it’s not surprising that many people overlook the importance of life insurance and increasing their life insurance coverage when they buy a home.
When you become a homeowner, purchasing life insurance is a way to protect your family and ensure that your loved ones will be able to stay in the home if anything unexpected were to happen to you. If you already own life insurance, you’ll likely need to increase your coverage to sync it with the amount of your mortgage. Your life insurance policy’s benefit—the amount your beneficiary will receive—should be enough to pay off the entire mortgage. That way, you know your family will not lose their home.
Many new homeowners who have life insurance policies through their jobs realize that these policies have limitations. If they leave their job, for example, they will lose their employee life insurance. And they also realize they will need additional life insurance to cover the mortgage amount so your family can keep the home you built together. When you purchase a home, it’s important to have personal life insurance through a trusted and financially strong provider, like New York Life. The life insurance you choose can be a combination of different features and products to provide mortgage protection.
For example, to make sure that payments toward your home will be taken care of if you were to pass away before your mortgage is paid off, you could purchase term life coverage for a set period of time and combine it with a permanent policy, such as whole life or universal life. This is a flexible way to maintain coverage even after your mortgage is paid off—or give you access to cash value that you can use to accelerate paying off your mortgage if needed.1 A New York Life financial professional can guide you through different scenarios that fit your needs.
If you have life insurance coverage through your job or have purchased a term policy outside of work to protect your mortgage, you may reach a point where it makes sense to convert to permanent whole life coverage to address your long term life insurance needs. With New York Life, if certain conditions are met, you may be able to convert your term policy to permanent protection without having to take a medical exam. You can even apply money you’ve already paid toward your term policy to lower the premiums for your first year of whole life protection. Having permanent coverage with a life insurance benefit gives you peace of mind because your home is financially protected and your family’s future is secure.
The homebuying process can be complicated; so can choosing the right life insurance policy. Just as working with a real estate agent guides your decisions around buying a home, working with a New York Life financial professional helps you understand the type of life insurance that will be right for you. The amount of coverage you need will depend on your mortgage, how likely your home is to need significant work, and your family’s needs. It makes sense to get solid guidance to make sure every contingency has been considered and proper protection is in place. Upgrading your life insurance coverage when you purchase a home and acquire a mortgage can bring a deep sense of security. That’s why meeting with a financial professional should be on your homebuying to-do list.
Upgrading your life insurance coverage when you purchase a home and acquire a mortgage can bring a deep sense of security. That’s why meeting with a financial professional should be on your homebuying to-do list.
1 Accessing cash value reduces death benefit and available cash surrender value.