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The Basics of Mortgage Insurance
Determining Your Mortgage Insurance Death Benefit Amount
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How much should my Mortgage Insurance death benefit be?
Determining Your Mortgage Insurance Death Benefit Amount
One of the first questions people have when they take out Mortgage Insurance is, “How much should my death benefit be?” While there is no perfect formula to determine this number for each individual who applies for Mortgage Insurance, there are some things you can do to help you find the right number for you.
- How much is your mortgage? Obviously, if you're buying Mortgage Insurance, your first priority is to pay off your mortgage, so at the very least, your death benefit should be for this amount.
- How much will it cost to put your children through college? The expense of college is one of the biggest concerns of parents everywhere, so it's worth considering when determining your death benefit.
- Will my spouse be able to replace my income? When you're a two-income family, it can be extremely difficult for a surviving spouse to take on enough work to cover the lost income of their spouse. In a single-income family, it might be easier, but then the surviving spouse may have to pay for the home care services they used to have time to provide. Adding an extra cushion in your death benefit to help your spouse replace your income for a few years is always a good idea.
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