Buying your first home is an extremely exciting—and often confusing—time. There's a lot to be enthusiastic about, but there is also a pretty steep learning curve. Especially for first-time homebuyers, understanding all of the different types of insurance that is necessary for complete coverage can be tricky. For example, while many new homeowners may think they have all their bases covered with a solid homeowner’s insurance policy, having an additional life insurance policy is usually a good idea, especially when you have a family. Here’s why.
Homeowner’s Insurance Only Protects Certain Things
Homeowner’s insurance is a necessity for people who own their own homes, but this type of insurance only covers certain things under very specific conditions. For example, your homeowner’s insurance might provide you with financing to refinish your basement when it’s ruined in a flood, or to buy a new iPad when it’s stolen. On the other hand, this type of policy provides no real relief to your family should something happen to you and you’re no longer able to help cover monthly payments on your home at all.
Life Insurance Protects Your Family Should Something Happen to You
Whereas homeowner’s insurance provides relief in the face of a current disaster or theft within your home, life insurance provides an overall road map for you to provide for your family when you are no longer able to. A life insurance policy can provide you and your loved ones with the peace of mind that your family can pay off your house and cover other necessary bills if something happens to you. A life insurance professional can help you determine how much a policy would cost you per month based on how much coverage you’d like, but people often decide to pick a policy that includes things like paying for college and covering bills associated with funeral costs, as well.
Life Insurance Can Leave a Lasting Legacy
The main goal of most life insurance policies is to provide immediate financial relief to your loved ones if something happens to you, but it can also help with future financial needs. Depending on the level of coverage you opt to get, a life insurance policy can help pay for your children’s college educations, or even leave them with some extra money to finance their own future financial goals, like down payments for their own first homes or paying for a wedding, for example.
Homeowner’s Insurance Covers the Here and Now, While Life Insurance Protects Your Financial Future
Homeowners—and especially homeowners with families—should consider both a homeowner’s insurance policy and a life insurance policy to cover all of their financial bases. While a homeowner’s policy will help your family out financially in the event of anything that happens to your home or belongings right now, a life insurance policy protects your family and provides the financial support they would need if something happened to you in the future. Together, these two policies can provide the peace of mind that whatever the future brings, your family will be financially secure.
While there’s not much we can do to predict the future, what we can do is put policies in place that help assure us that whatever does happen, we’ll be ready. A solid homeowner’s insurance policy combined with a thoughtful life insurance policy can do just that.