Are you gearing up to buy a home? Congratulations! Buying a house is probably the largest purchase you’ll ever make. If you purchase the home with a partner, among the conversations about decorating, landscaping and cable hook-ups, be sure to throw in a weightier topic: life insurance.
Why Life Insurance?
With suitable life insurance, you or your partner will be able to stay afloat, make mortgage payments and maintain your lifestyle even if one of you is no longer there to provide regular income. Purchasing life insurance is a good way to give your family the freedom to make decisions right for them.
Assessing Your Needs
If you’re ready to take on the responsibility of a mortgage, consider your financial needs should you or your partner pass away. You can figure out the amount of coverage that is right for you by adding up the expenses you hope to be able to cover with the policy, such as:
- mortgage costs
- funeral expenses
- medical expenses
- college funding
- income replacement
You’ll also want to consider into your calculations the amount of savings you currently have, including retirement savings and other life insurance policies you may have (individual policies, group term policies through work, etc.). The Navy Federal Finanical Group life insurance calculator can also help.
What to Look For
What you should look for in an insurance policy depends on your intent for the money. If you’re looking to protect your family from income loss, term life insurance is often the way to go. Some banks or mortgage companies may try to sell you a product called Mortgage Life Insurance when you purchase a home. This sort of policy often lumps your insurance payment into your mortgage payment and names the mortgage company as the beneficiary, rather than your family. As you pay your mortgage off, the total benefit of the Mortgage Life Insurance reduces, unlike other life insurance policies. Term life insurance and permanent life insurance policies instead allow your loved ones to use the money in the way that will help most, whether it’s toward the mortgage, paying off high-interest debt or investing the money for the future.
Navy Federal Credit Union offers members term life insurance and permanent life insurance policies. You can choose from a variety of policies, including no-medical-exam term life insurance, final expense insurance and disability insurance. Navy Federal is also happy to be able to offer life insurance policies specifically designed for military members.
As it turns out, preparing for life ahead can put you in a better position for meeting today’s goals. Learn more about finding the mortgage and life insurance policy that's right for you and your family by speaking with a Navy Federal Financial Group financial advisor today.