Mortgage Insurance: Just Another Expense?
Mortgage insurance is a wise move. Should anything happen to you, your
family would be protected by having mortgage insurance, or an
extra life insurance policy to cover the mortgage.
When you take out the loan on your house, the company financing your home will
often insist that you include mortgage insurance as part of the arrangement.
While this may seem like an unnecessary addition to your already full
expenditure list, it does make financial sense for the
mortgage company but also for you. However, just because you are
buying mortgage insurance from one company doesn't mean that you need use
that same company for your other insurance needs.
Take, for example, the case of Mary Jones. Mary and her husband Tom worked hard
to get a down payment together to buy a home. They had three children and they
both decided that Mary should stay home with the kids and quit her job. Tom had
a good job and a nice paycheck so it wasn't a burden.
A few years later, Tom was tragically killed in an auto crash, leaving Mary
alone to provide for her children without an income.
Thankfully Tom had
adequate life insurance to cover both the loss of income and the other
debts. Mary received a check from the
life insurance company large enough to support her and the kids until they
were grown, and enough money to
pay off the mortgage on the home. This removed the largest monthly debt and
gave the family the security of actually owning the house in which they lived.
Mary and the kids no longer had to worry about how they would meet the house
payment. The insurance covered it all.
Unfortunately, Mary's case isn't unique. Every year in America thousands of
people depend on mortgage insurance when unexpected tragedy occurs. Mortgage
insurance (or
additional life insurance to cover the mortgage) looks like a burden to
those who pay it, until they think about the amount of protection it provides.
Mortgage insurance, like any other insurance, is one of those things that you
are very glad to have when you finally need it.
In such a difficult time,
having enough insurance to cover the remainder of the mortgage, for many
families, has made all of the difference in security, in having a roof over
their heads, and in knowing that their futures are secure.
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