Why Should You Have Life Insurance When Buying a House?

If you purchased a home or are in the process of buying a home, you may have seen information about life insurance while comparing mortgages. When it comes to life insurance for a first-time home buyer, there is a lot of different information that can help you decide if you need life insurance as a home buyer. 

Life insurance is important when you own a home because it can protect your beneficiaries and family in unforeseen circumstances. It’s important to note that having life insurance does not help you qualify for a mortgage.

Arkansas Federal Credit Union offers a variety of life insurance policies through our partners. Finding a life insurance policy through Arkansas Federal can help protect your assets and your family. There are affordable life insurance policies with options to meet your needs and your budget. You can get a life insurance quote online today in seconds from up to 30 carriers. 

What Is Life Insurance?

Life insurance is a type of insurance policy that helps protect your loved ones and your financial investments in the case of an unforeseen death. If you were to pass away unexpectedly, having a life insurance policy will provide some sort of payout to the beneficiaries on your policy. 

There are many different kinds of life insurance policies that have various benefits. While shopping for a life insurance policy, it’s important to consider what you’d like a life insurance policy to help you protect.

When you request quotes from our Quote & Apply tool, you’ll be able to access a selection of different life insurance plans for your needs.

Why Do Homeowners Need Life Insurance?

If you own a home and have a mortgage, monthly mortgage payments will have to be paid for people to continue living in the home. For homeowners, life insurance is an excellent way to help protect anyone you live with. 

Life insurance will provide the beneficiaries on your life insurance policy with some financial support in case of an accident or death. If you own a home, your life insurance policy can help your beneficiaries continue to pay the mortgage.

In addition to paying for your mortgage, a life insurance policy can also help with additional expenses such as funeral costs and provide income for your family in the event of your death.

What Do You Need From Life Insurance

If you are getting life insurance as a homeowner, the size of your life insurance policy is essential. You should try to get a policy at least as large as your mortgage. That’s because your beneficiaries can pay off your current mortgage in case of an accident or death.

When comparing life insurance policies, consider the different kinds of policies available, what the total policy will pay out, and what expenses you’d like the insurance to cover for your loved ones. In addition to protecting your mortgage, you may opt to include additional coverage to take care of funeral costs or even provide long-term income to replace lost wages.  

Types of House and Life Insurance Policies

There are a few different options for life insurance policies. These policies vary in how they are structured, paid out, and who you can get them from. Your life insurance policy will likely be based on your current situation. These are a few options for life insurance policies that tend to be related to mortgages.

Term Life Insurance

Term life insurance is a policy with coverage for a specific period at a fixed payment rate. With term life insurance, you only have life insurance for the term. Once that period is over, you no longer have a life insurance policy to provide any sort of payout. It’s important to note that health insurance companies, not lenders, only offer term life insurance policies.

Mortgage Protection Insurance Policy

A mortgage protection insurance policy provides the funds needed to cover your mortgage. These policies can be temporarily applied if you are unemployed or can ultimately pay off your mortgage if you die. 

Mortgage protection insurance policies are beneficial because they don’t only pay out in the event of death. You can find mortgage protection insurance policies with most traditional lenders.

Private Mortgage Insurance Policy

A private mortgage insurance policy, frequently called a PMI, is not the type of policy you would get to protect your beneficiaries. These policies are life insurance that protects your mortgage lender if you cannot pay your mortgage. Private mortgage insurance policies repay your mortgage balance if you default on your mortgage but require you actually to default. You would not automatically get a payout if you lose your job, become disabled, die, or have something else happen that would cause you to be unable to make payments. 

How to Get Life Insurance

If you have a mortgage or any personal property you haven’t fully paid off, you may want to look into your options for a life insurance policy. It is crucial to get a life insurance policy that can protect your family and help them maintain possession of the property if you unexpectedly pass away. 
Arkansas Federal offers many different types of life insurance policies. You can use the Quote & Apply tool on our website to get a life insurance quote in just a few seconds. If you are interested in learning more about life insurance policies with Arkansas Federal, you can find helpful information on our website or visit one of our branches today to speak with someone about your options.