For many Americans their home represents both security and peace of mind. It is typically both their greatest financial investment and their greatest financial assets (for some outside their retirement plan). An unpaid mortgage may be one of the most overwhelming financial threats families face.
Whether this comes from the passing of a primary earner in the home, or high medical bills resulting from some critical illness, the question is: Would our client’s family be able to stay in their home?
In addition to paying their mortgage after a primary earner passes away or a critical illness brings high medical bills along with a loss of income during the recovery phase, protecting their homes for many of our clients means preserving important community and neighborhood connections with friends, schools, church, clubs and relatives.
Death or critical illness and its recovery can be emotionally devastating for our clients. It should not have to also be financially devastating.
If your client should die before their home is paid for you can help them protect against the loss of their home. They can have either a term life insurance policy, with a term for the length of their mortgage or some form of permanent insurance plan with riders or other features that can be converted or used for retirement purposes after the need for mortgage protection has passed.
But here’s the question that is not often asked and perhaps should be asked. What if your client should suffer a critical illness before their home is paid off? Should their mortgage insurance also have a critical illness provision? One that pays them a lump sum benefit upon diagnosis so they will know exactly how much money they are going to receive to help pay for uncovered medical expenses — you know, benefits that are payable in addition to any other existing coverage?
If your cilent is diagnosed with a critical illness and survives but has a long recovery period, wouldn’t the loss of income from not working cause their family to face just as much risk of losing their home as they would if the client died?