A Homebuyer’s Guide to Life Insurance
Congrats on your new home! Now it’s time to think about life insurance. How would your significant other handle the mortgage if you were gone? We have the answers in our guide to life insurance for new homeowners.
life insurance for new homeowners
As we get older, we start to think about the really important financial aspects of personal finance… like buying a life insurance policy. Besides providing for your family and covering funeral expenses, one really good reason to consider coverage is if you’re a new homeowner.
Buying a house is a significant expense and a big responsibility. Not only are you signing on for 15 or 30 years of debt, but you are establishing your family’s home. And you hope they wouldn’t have to move in the event of your passing.
So today, let’s talk a bit about choosing the best life insurance for homeowners. We’ll discuss some of the more important considerations involved in picking the right coverage and the companies that offer your perfect policy.
What to Consider
Calculating the right life insurance coverage for you and your family is never easy. Each family’s needs are different from the next, and you’ll need to consider a number of factors. Some of these are:
Your current salary
Outstanding mortgage loans
Future expenses, such as your children’s education
Health insurance coverage
Your family’s monthly bills
If you’re a homeowner–especially if you bought your home recently–your mortgage should be one of the biggest factors in calculating a coverage amount. After all, you probably don’t want your family to be forced out of their home (whilst dealing with their newfound grief, no less). So, you’ll need to ensure that your policy payout will pay the mortgage.
It’s easy to find a term policy that provides just enough coverage for your remaining mortgage debt. These types of life insurance products have lower monthly costs but allow you to choose a sufficient coverage amount for a specific number of years.
If needs change–you have additional children, your salary increases or decreases, you buy a different home, or household expenses shift–you can often alter the coverage amount mid-policy, too. Be sure to read the fine print for your chosen policy to see whether you’re able to make coverage changes and, if so, how often it’s allowed.
Our Selection Methodology
Choosing the perfect insurance company is tricky. Obviously, price is a consideration. After all, you’ll be paying for your coverage each month for years to come. You want it to be affordable!
However, price shouldn’t be the only concern. You want to pick a life insurance company that has a history of reliability and a record of good customer service. You want to ensure timely payouts. And perhaps flexibility (such as the ability to opt in for a living benefits rider) is a priority for you.
Lastly, you want to ensure that the company not only offers coverage in the amount that you need, but that you can shop for and purchase a policy both quickly and easily.
We compared most life insurance companies in the industry today to determine which ones truly are the best for homeowners. We looked at coverage limits, customer satisfaction, flexibility of benefits, and, of course, pricing.
This is what we found.
Our Top Pick
After reviewing all of these different companies, we’ve determined that our top pick overall is Haven Life. The company has a long history of excellent customer service, financial security, and great benefits.
Backed by MassMutual, Haven Life offers policies up to $2,000,000. This is more than likely enough to not only cover your new mortgage balance, but also replace your salary and provide for your family’s future if you were to pass away.
The neatest feature is probably the InstantTerm option. It allows applicants 45 or under the ability to apply for a policy online, sans medical exam, and get approved immediately. If you’re looking for quick, easy coverage that’s reliable and adequate, Haven Life has what you need.
Here are the companies that we consider to be the best five. These are where you should look first when seeking out your next (or first!) life insurance policy as a homeowner.
If you’re looking for affordable coverage with a number of term options, consider TIAA Life. Policies are available for periods of 10, 15, 20, or 30 years, and you can select coverage in excess of $1,000,000.
Applying for a TIAA Life insurance policy involves a complimentary health screening to determine eligibility and calculate premiums. If you need coverage quickly, this probably isn’t the company for you. Receiving a final decision on your coverage usually takes about three or four weeks from the time you apply and complete your health screening.
However, A.M. Best gave TIAA Life a financial strength rating of A++ (or Superior). One other great thing about TIAA Life is that they allow term policyholders to convert over to permanent policies at any time.