For most people, obtaining the American dream is achieved by buying a home and getting into debt for the next fifteen or thirty years. You’ll spend a substantial portion of your savings for the necessary down payment, leap through all the hoops mandated by your lender, spend numerous hours searching the marketplace, all to get to that marvelous day. You have made it, and it feels great! What about mortgage protection?

After moving in and making the house your home, you start to encounter some uneasiness while making an attempt to get some sleep. Your brain starts running the “what if” scenarios and you start to stress about what would occur if you died unexpectedly. How might your lovely wife make that huge mortgage payment without having your portion of the household income?

The first step you take the next morning is to contact your Insurance professional and run this predicament by him. He points out that the life insurance you have at your workplace is not enough to take care of repaying your mortgage and suggests you start thinking about Mortgage Protection Insurance.

Mortgage Protection Insurance

Mortgage Protection Insurance is a straightforward and inexpensive concept. It includes buying a term life insurance policy in the amount of your home mortgage balance so that if you might die suddenly, your surviving loved ones will have the money required to pay off the mortgage on their home. Term insurance is the most reasonably priced way to monetarily protect your loved ones and make sure they can stay in the family home.

You can buy a 30-year insurance policy to cover a 30-year home loan or a 20-year policy to cover a 15-year home loan. In every single case, your insurance protection is not decreased even though your mortgage is reduced. This ensures that there will be adequate funds available no matter when you die during the policy period.

When your coverage runs out after 20 or 30 years, your home loan will be settled but you can renew the coverage without being required to prove you are still in good health, or you can convert the insurance policy to a permanent insurance policy and then have insurance coverage for your lifetime.

What about Your Spouse’s Income?

Knowing that most families rely on combined incomes to meet expenditures, you can include your spouse on your policy using the Additional Insured Rider. That way if either of you dies out of the blue, the remaining spouse will be in a position to pay off the outstanding balance and remain in the family home.

Other Riders That You Should Consider

One of the awesome options about term life insurance is that there are a number of riders that you can add to the policy to expand your coverage. Utilizing riders will change your insurance coverage to more than just a death benefit.

Return of Premium Rider – having the return of premium rider will provide for all insurance premiums paid into the policy to be returned to you in one lump-sum payment if you live longer than your policy term. Even though the rider costs about 20 to 40 percent extra premium, it is a reasonable manner for your family to help save for retirement while insuring against your unforeseen death. The added cost of the rider for young adults has a minor effect on the month to month insurance premium.

Child Term Rider – The child term rider permits you to add all of your current children and all children born or adopted at a later date to the insurance policy for a minimal additional cost. The additional insured rider and the child term rider will enable you to turn your term insurance policy into a family plan.

Accelerated Benefit Rider – The accelerated benefit option is a primary coverage for most term policies however if not, it can usually be added to the policy at no additional charge. This rider provides for the life insurance company to pay out a benefit of up to 75 percent beforehand to a covered person that has been diagnosed with a critical illness. The advance payment enables the insured to take care of final obligations before they pass instead of leaving it to survivors. The total amount paid out will be subtracted from the death benefit due to the beneficiary when the insured person eventually passes away.

Accidental Death Benefit – The accidental death benefit, also often referred to as “double indemnity” allows the insurance company to pay a multiple (typically double) of the face amount if the insured person’s death is the direct result of an accident.

Waiver of Premium – The waiver of premium rider is a form of disability insurance that will pay your policy’s premium as long as the insured person is disabled and is unable to work. The rider typically includes a waiting period, a period of coverage, and the insurer’s definition of disability.

Long-Term Care Rider – The long-term care rider is like the accelerated benefit rider where the insurance company will make an advance payment of the death benefit to the insured if he or she is diagnosed with an affliction that forces them to live the balance of their lives in a nursing facility. The amount that is advanced to the insured will be subtracted from the death benefit when the insured eventually passes.

Additional Insured Rider – This is the rider that will permit you to add your husband or wife to your insurance policy with a death benefit up to the limit of the insurance policy.

The Mortgage Protection Plan

For the majority of borrowers, providing financial security for the family is a substantial concern after putting your signature on the dotted line. There is no more budget-friendly way to financially cover your loved ones than by developing a mortgage protection plan to pay off the home loan on the family home.

Since the death benefit stays level during the term of the insurance policy, but the mortgage is reduced by monthly payments, if you died late in the policy term, your remaining loved ones would have the additional funds necessary for a funeral or other final expenses.

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