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Plan Ahead | New Home!

Plan Ahead | New Home!

July 13, 2023

Congratulations on buying a house! This is a significant accomplishment, and you should be proud. But as you celebrate, it's important to remember that life insurance is also essential to homeownership.

Life insurance is necessary for homeowners for many reasons; you will find a few of those reasons listed below.

  • To protect your family's financial future. If you die, your family will still have to make mortgage payments, property taxes, and other expenses. Life insurance can help ensure that they have the financial resources they need to stay in the home. 
  • To pay off your mortgage. A life insurance policy with a death benefit equal to your mortgage balance can ensure the mortgage payments will be paid after you're gone. Example: Friends purchase a home together; they each own an equal share of the house. If one passed, the other would be responsible for paying the entire mortgage. If they both have life insurance for half of the cost of the home and named the other as beneficiary, neither one would be burdened with a mortgage they could not afford alone in the event of a death.
  • To cover other expenses. Life insurance can also cover other expenses, such as your funeral costs, college loan payments, or medical expenses.

The amount of life insurance you need will depend on your individual circumstances. However, suppose you have a family to think about. In that case, a good rule of thumb is to have enough life insurance to cover their financial needs for at least 10 years; this includes paying off current debts and replacing your income. Paying off your mortgage can be included in the above, or you can purchase a separate policy for this purpose. Affording life insurance should not be looked at as a luxury but as a necessity. We protect our homes with homeowner's insurance; we should also protect those we live with, whether it is our family, a friend, or our significant other.

Our LPL Financial advisors at Dixon Financial Group, LLC can help you find the insurance policy or policies that best meet your needs. If you need help determining the need for life or disability insurance, talk to our advisors; they can help determine which insurance(s) is right for you and how much you need.

New Home? It is time to take the next step; contact the Dixon Financial Group, LLC team today.

David S. Dixon, CFP®

Jacob S. Bierstedt, CFP®, ChFC