Life Insurance essential for homeowners
If you own your own home then you should have heard of life insurance. It provides customers with a policy that will pay out a lump sum payment in the event of their death, and often runs for the duration of a mortgage. Life insurance has always traditionally been offered to customers when they take out a mortgage, and is a requirement of some mortgages such is the importance of a policy.
To look at the reasons to take out life insurance when you buy a home you only need to look at a couple of the examples below, and the very different outcomes as a result of one having, and one not having life insurance.
Dave and his wife Sandra bought a £200,000 townhouse together just before they had their first child. They then had a second child as well, and both parents worked full time jobs whilst their children went to nursery during the day. They had a £180,000 mortgage on their home and their repayments were a little over £1000 each month.
Then one day Dave was hit by a bus and died, leaving Sandra with two children and huge monthly mortgage repayments. He didn’t have life insurance so she wasn’t left any money, and very quickly she fell behind on mortgage payments and her home was repossessed. She’s had to start completely afresh and now rents a much cheaper flat.
Peter and his girlfriend Sue both had life insurance, and bought a £120,000 flat when they left university. They had a £90,000 mortgage and paid just under £600 a month for the flat. Both worked but neither would be able to afford the mortgage and bills on their individual salary. When Sue fell ill and died suddenly, Peter was worried he would have to sell his home, until he realised Sue had a £150,000 life insurance policy. It allowed him to pay off the mortgage completely, and he was able to afford to live in their flat together on just his salary, as well as having a little nest egg for the future.
If Dave had spent just a few pounds a week on life insurance his family would have been able to stay in their family home, and continue living a comfortable life. Life insurance is so important for homeowners so if you don’t have it, compare insurance quotes online today.