by mayramm11 » Tue Jan 27, 2015 11:35 am
I understand that you can buy life insurance that will cover the cost of your home in case you die before you finish paying for it. The loan is 120k and is on my name. I want to leave the home to my two disable children, and want to make sure they don't loose the house if I die before I finish paying for it. Any input as to the type of insurance I should buy and the premiums I will pay will be really helpful. I am a female age 50. Thank you!
Posted: Tue Jan 27, 2015 12:58 pm Post Subject:
you can buy life insurance that will cover the cost of your home in case you die before you finish paying for it.
Yes, that is true.Can't tell you what the premiums would be because there isn't enough information to do so, and the information needed should not be discussed in an open forum such as this.
But I don't believe you have fully considered the implications of leaving your home mortgage-free to your disabled children. Will they be able to manage the future ownership of a home, even if there is no mortgage? If not, who will do this for them? And for how long, and how much will that cost?
Although you may currently owe $120,000 on the mortgage, the expenses of home ownership do not end once the mortgage is paid off. There are utilities, taxes, maintenance and repairs, and insurance costs for an unknown number of years into the future to consider. In addition, your children may need caregiver and housekeeper assistance in addition to food, clothing, medical insurance, legal representation and/or a trustee or guardian, and many other things which can only be solved with money once you're dead and unable to provide them.
Your required life insurance amount could easily be $1,000,000 - $5,000,000 . . . possibly much more. You have to count the current cost to provide for all these contingencies and factor in the assumed effect of inflation, as well as your children's life expectancies.
You could assume a historical 4% inflation factor, and be seriously wrong if we experience another decade of double-digit inflation as we endured in the mid-1970s and early 1980s -- you might not recall that annual inflation peaked in that time period at about 19%.
Our current 3% or less rate of inflation today is minuscule by comparison, but it is not going to last forever. The cost of enacting the PPACA, illegal immigration, fighting wars and terrorists in the Middle East, "free community college," and numerous other expenditures for which America has no real money to pay, will eventually have to be paid for by the taxpayers, and that will surely spark a new round of inflation, possibly even "hyperinflation."
Some life insurance agents might be able to figure your need, but a Life & Disability Insurance Analyst (or Counselor or Consultant depending on what state you live in) certainly can do this. That's what we get paid to do.
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