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Weird question... A long time ago, let's say about 10 years ago, a friend of mine was trying to explain his father's mortgage to me, said that if his father died, he'd get the house and wouldn't have to pay the rest of the mortgage, or what was owed on it. Is that possible? If I buy a house, is there a clause or insurance or something that could be put in place, so in the unfortante event that something happens to me and my spouse that our child is not left with the burden of a mortgage payment?
@zhenxinqian wrote:Weird question... A long time ago, let's say about 10 years ago, a friend of mine was trying to explain his father's mortgage to me, said that if his father died, he'd get the house and wouldn't have to pay the rest of the mortgage, or what was owed on it. Is that possible? If I buy a house, is there a clause or insurance or something that could be put in place, so in the unfortante event that something happens to me and my spouse that our child is not left with the burden of a mortgage payment?
Yes, there are insurance products that payout mortgage balance. But you would be better off with a traditional life insurance policy. Here's how wifey and I figured it:
We both work, so if one of us passed we would need to cover the missing income, pay off any debt, have savings for our children's college, funeral expenses, and coverage for the missing retirement savings. After playing with the numbers, we decided we needed 500,000 for each of us. We decided not to go for a whole life policy, instead took the cheaper route of a 30 year level term. That means that we pay the same rate for the next 30 years, and if we make it to the end get nothing.
We figured that by mid 60's we'll be retired, our house will be paid off, and our kids will be grown, so the need for a huge policy like that will be gone. Buying in now got us a much lower price, and each of us knows the other will be ok if something happens.
There are lots of people who know more about insurance, but in my estimation this is the best way to go. Put pencil to paper, and figure out how you would get by without the other person's income. The mortgage will not be the only concern.
If you are eligible, check out USAA. That's who we're using.
Thank you. We're both military now, so it doesn't seem like much of a worry at the current time, but I'm under the impression if you buy insurance younger, it's cheaper. I'll do some research. Thanks for your input.
@zhenxinqian wrote:Thank you. We're both military now, so it doesn't seem like much of a worry at the current time, but I'm under the impression if you buy insurance younger, it's cheaper. I'll do some research. Thanks for your input.
You should have life insurance already if you're both military. When I was in it was automatically 100k with optional payroll deduction to raise it. Check your LES to see if you have it, or talk with your pay clerk at your company HQ. That is probably your best bet if you're active duty. But definitely look into level term after you ETS, or in your mid 30's before the rates go way up. And get your USAA # if you don't have one already.
And remember, there are no stupid questions, just inquisitive idiots.
Our payroll deductions are about $26 a month and it pays out I think $400,000 each. We're still young and both plan on staying in for another 10+ years. So I guess I'm just jumping the gun. Hopefully nothing happens and it's pointless worry. We have USAA accounts, I'll look into getting supplemental life insurance through them in the future. Thanks again for the advice!