Keep your family, your home, and your credit safe.
For many people, buying a home is the realization of the American Dream. A home is our place of security and comfort, and often, our homes are generally our biggest investment and most important asset. In our home, we are sheltered and safe. That safety can be shattered though, if the unthinkable happens and you unexpectedly die. This is where the relationship of Mortgage Protection Life Insurance (Mortgage Protection Insurance) and bankruptcy comes in.
Mortgage Protection Insurance may help keep your family financially safe should you die.
With Mortgage Protection Insurance, if you die, depending on how much insurance you buy, your entire mortgage could be paid off. Instead of paying off the entire mortgage, your family may also decide to keep making the payments, or just pay a portion of the loan; it’s their choice.
You can probably imagine the devastating effects your family would suffer if they lost your income, such as needing to move to a smaller home or changing schools for your children, but what about the possible damage to their credit?
Sadly, death and bankruptcy oftentimes go hand-in-hand.
Protect their credit
A bankruptcy may lead to a legacy of bad credit for your loved one.
Is there someone else on your home loan loan paperwork? A spouse? A relative?
If your family is pushed into a financial crisis due to the loss of your income, and they have to claim bankruptcy because they can no longer pay the mortgage, their credit score will suffer. This could possibly mean 7 to 10 years of a lower credit score for your family member, depending on the type of bankruptcy.
They may not be able to purchase another home for awhile or may end up paying future loans with high interest rates.
Protect your credit
It may surprise you to know that you can use your Mortgage Protection Insurance while you are still alive.
You can take advantage of living benefits* to help prevent your own bankruptcy. For example, in addition to your basic Mortgage Protection Insurance policy, you can get add-on insurance riders, such as a Critical Illness Rider or a Disability Rider. Because a common reason people file bankruptcy is due to overwhelming medical bills, these riders may play an important role in helping you avoid bankruptcy during a health crisis.
A Critical Illness Rider provides much needed funds if you are diagnosed with a heart attack, stroke, cancer or other life-threatening diagnosis. A Disability Rider can help pay your mortgage or other bills while you are unable to work due to a disability.
There are many other riders available to help provide you with financial protection, so make sure to ask your insurance agent about your options.
More than just paying for your mortgage
Mortgage Protection Insurance can be also used for more than your home mortgage. It is not limited to just paying off your home loan. Your family can choose to spend the money any way they need to. For example, if the money is needed for medical bills after you pass away, they can choose to pay those bills with the Mortgage Protection Insurance funds.
Bankruptcy can also impact future insurance purchases
An unknown fact:
Some insurance companies may not allow you to purchase Life Insurance or Mortgage Protection Insurance in the future if you have had a bankruptcy (taking into account other factors as well).
Don’t become another bankruptcy statistic
When you buy Mortgage Protection Insurance you can breathe a sigh of relief – your mortgage will still be paid if you die, and if you decide to get additional coverage through riders, you can also protect yourself against bankruptcy should you need the insurance while you are still alive.
Asurea offers Life Insurance, Mortgage Protection Life Insurance, Medicare Supplement Insurance, Final Expense Insurance, Disability Insurance, Long-term Care Insurance, Retirement Planning products and more. For additional information, click on the ‘Learn more’ button below. Want to have articles just like this delivered to your inbox? Just enter your email address in the box below and click ‘Subscribe.’
Loans borrowed from your life insurance policy will accrue interest. An outstanding loan balance (loan plus interest) will be deducted from the death benefit at the time of claim. *Accessing cash values may result in surrender fees and charges, may require additional premium payments to maintain coverage, and will reduce the death benefit and policy values. Dollar amounts are for illustrative purposes, not actual