Every household should have a budget and continues to address all of the specifics of household finances. The next area that we need to discuss is life insurance policies.
Let me first say, I AM NOT LICENSED TO SELL INSURANCE! I am sharing with you some information I learned from one of trusted referral partners. Please remember, every household may have different needs so you should speak with a trusted insurance professional for your specific situation.
The question I asked was, "If someone owns a home, what are some guidelines on how much life insurance should they have?" He made a valid point. If you own a home, you should carry enough life insurance to pay off the mortgage. Paying off the mortgage takes the pressure off your family as making that payment. It also will give those left behind time to make disposition decisions in their time after they have had a chance to grieve the loss of their loved one.
So let's look at a scenario. Let's say a married couple with 2 children have a $200,000 mortgage on their home. Both were working and they used both incomes to qualify. If one spouse dies, the other will struggle to make that mortgage payment. If the life insurance pays off the mortgage, living on the single income may be a less stressful resolution for their new situation.
Make sure you have a plan to protect your family.
Here are other blogs in this series:
Every Household Should Have a Budget - Getting Started
Every Household Should Have a Budget - Step 2
Every Household Should Have a Budget - Savings
Every Household Should Have a Budget - Checking Account
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