Monday, December 13, 2010

Life Insurance

Today we had a meeting with a representative from FaithLife Financial.  Looking into insurance has been one of those things we knew we should do, but never got around to.  And, I admit for me, Life Insurance hasn’t really been something I considered part of our financial health plan. But it is! 

At first, it was hard for us to think about spending that extra each month, when we are trying to pay down debts, but really, neither of us wants to leave the other with all that debt alone!  Plus, our advisor gave us some good advice.  Ditch the mortgage insurance through the bank.  You pay the same thing the whole term, but you have declining coverage ( as you pay off your mortgage).  And, once you need it ( your spouse is injured or dies) THEN they put an application through.  So you may not qualify, after you need it!  You’ll pay that premium for years, and could still not be eligible.  Instead, he recommended having enough life insurance to cover your mortgage.

So we sat down, and came up with how much coverage we need.  And let me tell you, it’s waaaaaaaay more than I might have guessed.  To cover the mortgage, and replace Shawn’s potential lost income long enough to get on my feet, as well as cover a funeral added up to a lot.  We covered both of us for that amount, so that if something happens to me, Shawn will also be okay left to take care of all the kids without my contributions to our family. 

Then we discussed insuring our kids.  No one wants to imagine that eventuality, but IF something happens, I do not want to worry about how I will pay for a funeral.  We added a bit more coverage, too.  If Shawn wanted to take time off to grieve, I’d like to have the freedom to make that choice. 

We also know that if something happens to both of us, the guardian of our children will be left with enough to care for our kids without worries.

Once we knew what all we needed to cover, we added up what the premiums will be.  And you know what? It wasn’t that much more than what we are paying for the mortgage insurance alone.  Once we cancel the bank’s mortgage insurance, and have the new insurance in place, we’ll only be spending a little bit more each month.

He also recommended that we meet with a mortgage broker to see if we can move our mortgage to save money, so we’ll be looking into that this week.  Next up after that? Wills.

1 comment:

  1. Very interesting, Melissa - thanks for posting and explaining. I'm curious if there will be a fee for cancelling the mortgage insurance, and how much it would be...I have no clue what we have - should definitely get that figured out!!! Good for you guys!!!


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