Insurance World

Discussing the need for life insurance is never a pleasant topic, and certainly combined with talk of mortgage payments, it can be downright distasteful. But it is your responsibility as the principle breadwinner in your home to consider what might happen if you or your spouse were to perish. Would your spouse be able to meet the most basic needs of food and shelter? While the money necessary to pay for basic amenities like food and transportation are attainable through a single income source, most families simply cannot afford to meet their most basic requirement, the mortgage payment, without the income from both spouses.

How it Works
If you are in this situation, it is important to take the necessary precautions in case you or your spouse dies unexpectedly. While saving enough to cover your mortgage is certainly an ideal solution, it is largely unfeasible for most contemporary families. As a result, individuals often opt for mortgage protection life insurance policies. These policies are designed specifically to meet the needs of your home mortgage payment in the event that you or your spouse dies.

The idea behind mortgage protection life insurance is simple: you pay a monthly premium in exchange for which the insurance company agrees to pay off the rest of your mortgage should you die.

Pricing
Pricing for mortgage protection life insurance policies parallels that of traditional life insurance price criteria. For example, if you smoke your rates will be higher, just as if you are an older individual. But certainly the most determinative factor in your price will be the amount of coverage you need. The more you owe on your home, the more insurance you will need to pay it off, which of course means the more expensive the insurance premium will be.

Alternatives to Consider
While mortgage protection life insurance will cover your mortgage payment, as all home owners know, this is only part of the cost of owning a home. In addition there are taxes and repairs to prepare for. For a family that has lost a breadwinner, making these types of allocations can be difficult. As a result, many individuals opt for coverage which goes beyond just mortgage protection and instead provides payments sufficient to cover all the expenses associated with owning a home. This type of insurance often comes in the form of a term life policy which is for an amount which exceeds the price of your home. Of course, this extra coverage comes with a price. But with this coverage also comes quite a bit more flexibility. Under a term life policy your family is not bound to pay off the house with the money they receive, but can instead use it in whatever manner they feel most compelled to. This can be especially helpful if there are other medical costs to consider or if you have children approaching college age.

Life insurance is not a pleasant concept to consider because it requires that we think about the potential for our own demise and the resulting consequences of our death. It is vital, however, that as individuals who are responsible for the financial support of others, we consider these difficult questions and decide whether a life insurance policy is the best solution for us.

Buying life and health insurance products is something that many of us keep putting off for as long as we possibly can. We know that we should buy into these insurance policies but we tend to shelf the idea, preferring to live for today rather than plan for tomorrow. Rather like an ostrich sticking its head in the sand, a lot of us it seems choose to take our chances in the hope that our circumstances will never merit the use of life or health insurance. But it can be an awfully big gamble to take.

Advantages of a life and health insurance policy

As we get older we often become more susceptible to health problems, disability and poor mobility; eventually of course we will all die. Both situations are naturally very distressing for family and dependants. However, the situation can be made worse if the ill / deceased was the main income producer and there are still bills to pay. The last thing anybody wants in this situation is to have the bailiffs knocking at the door, or your home repossessed because you cannot keep up your mortgage repayments.

A life and health insurance policy combines cover for the likely and the inevitable. By opting to take out a life and health insurance policy you and your family will have peace of mind that should you become critically ill or die during the term of the policy, your family and dependants will be financially secure. There will be no worries about bailiffs or repossession orders and through the health insurance side of the policy you’ll be able to select a level of quality health care to suit your needs rather than relying on treatment through the NHS.

Cover provided by a life and health insurance policy

The cover provided by a life and health insurance policy is quite comprehensive. On the life insurance side of the policy you will be able to choose between a term life insurance product and a reducing or decreasing life insurance product.

Term life insurance via the policy pays out a fixed lump sum upon the death of the policyholder, providing the insurance policy is still active. A reducing term life insurance policy is a type of insurance where the amount paid out upon death reduces to zero in line with the policyholder’s mortgage balance, and is suitable only as a financial instrument with which to pay off the mortgage in the event of an early death. If you want to leave your loved ones in complete financial security then a term life option on the policy is recommended.

The health insurance part of the mega insurance policy provides comprehensive health care. It will cover you for all diagnosis, treatment and recovery costs associated with the illnesses, disability and diseases noted on the mega policy. Health insurance also means that you do not have to wait for treatment on the NHS. Instead, you will be able to select when and where you want to receive treatment, so tailoring it to your own convenience.