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Protecting my family financially if I die
There are many things you can do to help protect your family in the event you should die when not expected. There are numerous life insurance and mortgage protection plans on the market today that you and your family can benefit from.
Having a simple term life insurance policy can help to protect your family
if you should happen to die. A term life insurance policy taken out in at
least the amount of the mortgage will pay off the mortgage in its entirety
should you die. This amount will remain constant throughout the term of the
policy unlike credit life, which the value will decrease as the mortgage
balance decreases. Therefore, a simple life insurance policy can protect
your family finanically if you die. Credit life is a type of insurance that will pay off the remainder of your mortgage if the insured should pass away. This is a costly insurance and only covers the balance of the mortgage that is left. Therefore, if something happened 13 years into a 15 year mortgage and the outstanding balance remaining was only $7,500, this is the amount the insurance would pay for after paying for the insurance for 13 years. Explore all of your options before obtaining this type of insurance. Many times a term life insurance policy will be cheaper and it will pay the full insured amount for the entire term of the policy. Once you acquire a home and begin to acquire some personal assets drawing up a living will is a great idea. Without a living will the state government can decide how your assets will be distributed. If you are recently married make sure that your spouse and or children are added as the beneficiary's to your life insurance and any financial and investment accounts you may have. Contact your insurance agent to set up Mortgage Insurance through a life plan. If you were to die, be hospitalized or become disabled, your family may be unable to qualify for a mortgage to take equity out of your home to cover any expenses.
To protect your family, you should not only have life insurance, you should have an emergency fund of 6 months income in a liquid investment, such as a money market fund or a mutual fund, to get them through until insurance payments arrive. Everyone has a different idea of how much money is enough to support their family if they die, and there is no "right" formula. Some experts suggest having a policy that is at least five times your annual salary, other recommend having coverage sufficient to payoff all outstanding debt plus enough to cover X years of living expenses. There is no answer that is right for everyone, so be sure to talk to your financial planner, accountant and most importantly your spouse to determine the amount of life insurance that is right for you. Mortgage insurance sold today involves both term insurance policies combined with disability. You need both to have a good mortgage protection plan.
In order to keep your home out of your state's probate courts and in the control of your family, consider forming a revocable living trust or inter vivo trust. It is normally a good idea to refinance prior to placing the property in trust, as even though the trust is revocable, the process of refinancing is significantly more complicated while the property is inside a trust. While there are a variety of loan programs that will allow you to close even in trust, the majority require that you take the property out of the living trust and then put it back into the living trust after closing. We specialize in handling living trust and revocable inter vivos trust refinancing, and have successfully arranged financing for trustees and families across the nation. For more information please contact us at 888-418-4467 or dave@gofirstsecurity.com
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Information listed above is to be used for educational purposes only and is not guaranteed
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