Case Study: Mortgage Life Insurance Planning
Jack and Jill
They are both 35 years old.
They have two young children ages 8 and 6.
They sold their condominium and bought a townhouse.
Their townhouse mortgage is $1,000,000.
Their mortgage amortization is 25 years.
Jack and Jill have the same fear;
If one or both of them were to die then the remaining family members would be in financial disaster.
The purpose of the mortgage life insurance is to pay off the mortgage in the event of accidental death and also leave additional Cash for the surviving spouse and children.
Jack and Jill selected mortgage insurance from their lender as a condition for giving them the mortgage but the insurance premiums are high.
Case Study (cont’d): Term-Life-Insurance Single-Coverage
In Scenario One: Jack and Jill decided only Jack shall purchase a 10-Year Term-Life-Insurance Policy, and I helped Jack and Jill chose the most suitable plan from a list of insurance companies.
Case Study (cont’d): Term-Life-Insurance Joint-Coverage First-To-Die
In Scenario Two: Jack and Jill decided both Jack and Jill shall purchase a Joint-Coverage First-To-Die 10-Year Term-Life-Insurance Policy, and I helped Jack and Jill chose the most suitable plan from a list of insurance companies.
Case Study (cont’d): Whole-Life-Insurance Joint-Coverage First-To-Die
In Scenario Three: Jack and Jill decided both Jack and Jill shall purchase a Joint-Coverage First-To-Die Whole-Life-Insurance Policy, and I helped Jack and Jill chose the most suitable plan from a list of insurance companies.
Case Study (cont’d): Important Advice
The short-term Advantage of Term-Insurance is the low Monthly Premium in the beginning.
The long-term Disadvantage of Term-Insurance is the life insurance premiums can increase so high that it becomes unaffordable.
The long-term Disadvantage of Term-Insurance is when Jack and Jill no longer needs Life Insurance coverage and they decide to cancel their policy, they are not able to get back all the monthly premiums they paid over the past years.
Term-Insurance might be a suitable short-term Mortgage Life Insurance Plan in the beginning because the Monthly Premium is low.
A more suitable long-term Mortgage Life Insurance Plan is for Jack and Jill to purchase Whole-Life -Insurance or Universal-Life-Insurance.
Case Study (cont’d): Term-Life-Insurance Single-Coverage
In Scenario One: Jack and Jill decided only Jack shall purchase a 10-Year Term-Life-Insurance Policy, and I helped Jack and Jill chose the most suitable plan from a list of insurance companies.
Case Study (cont’d): Term-Life-Insurance Joint-Coverage First-To-Die
In Scenario Two: Jack and Jill decided both Jack and Jill shall purchase a Joint-Coverage First-To-Die 10-Year Term-Life-Insurance Policy, and I helped Jack and Jill chose the most suitable plan from a list of insurance companies.
Case Study (cont’d): Whole-Life-Insurance Joint-Coverage First-To-Die
In Scenario Three: Jack and Jill decided both Jack and Jill shall purchase a Joint-Coverage First-To-Die Whole-Life-Insurance Policy, and I helped Jack and Jill chose the most suitable plan from a list of insurance companies.
Case Study (cont’d): Important Advice
The short-term Advantage of Term-Insurance is the low Monthly Premium in the beginning.
The long-term Disadvantage of Term-Insurance is the life insurance premiums can increase so high that it becomes unaffordable.
The long-term Disadvantage of Term-Insurance is when Jack and Jill no longer needs Life Insurance coverage and they decide to cancel their policy, they are not able to get back all the monthly premiums they paid over the past years.
Term-Insurance might be a suitable short-term Mortgage Life Insurance Plan in the beginning because the Monthly Premium is low.
A more suitable long-term Mortgage Life Insurance Plan is for Jack and Jill to purchase Whole-Life -Insurance or Universal-Life-Insurance.