On Your Terms


On Your Terms

For homeowners, term life insurance is often viewed as a safeguard for mortgage repayment in the event of death. But limiting a policy to just a death benefit misses vital protections. Smart financial planning calls for adding riders that provide broader security—especially for job loss, critical illness, and income protection—giving homeowners peace of mind in life and not just after death.

A loss-of-job rider can provide temporary premium relief or monthly payments if the policyholder becomes involuntarily unemployed. In a volatile job market, this rider acts as a buffer, helping homeowners avoid dipping into emergency savings or defaulting on mortgage payments.

Similarly, a disability or critical illness rider pays a portion of the mortgage or even the full balance if the insured becomes seriously ill or disabled. With medical debt now the leading cause of bankruptcy in the U.S., this rider helps keep a roof over the family’s head during health-related hardship—when income stops but bills don’t.

Of course, the core of term life insurance remains the death benefit. But too often, families make the mistake of aligning the benefit amount to just the mortgage balance. That’s short-sighted. A home without income can still become a burden. Instead of directing the death benefit toward paying off a house, the policy should be structured to replace years of income, allowing dependents to maintain their standard of living—whether they keep or sell the home.

The real value of life insurance is not the property—it’s the protection of people. A surviving spouse or children need flexibility: to grieve without immediate financial stress, to afford education, childcare, or to relocate if necessary. That’s why the death benefit should serve the living, not the lender.

If you are a homeowner, you should view term life insurance not just as a safety net for your mortgage, but as a comprehensive tool for the protection of your household’s welfare. Adding job loss and critical illness riders transforms a basic policy into a practical, living safety shield—one that protects families from the unpredictable blows of life – on your terms.


 

THIS WEEK’S QUIZ: When is the best age to begin retirement planning?

Answer to last week’s quiz: An Accelerated Benefit Rider—also called a Living Benefir Rider—allows a life insurance policyholder to access a portion of the death benefit while still alive if diagnosed with a terminal illness (typically with a life expectancy of 6 to 24 months, depending on the policy).

 

To get a more detailed answer to last week’s QUIZ question or for any financial questions that you may have, please contact me: 773-817-0601 or basheriff1@gmail.com

Disclaimer: The illustrations presented in this column are not, nor are they intended to be, legal, financial, or any other licensed professional advice, you should contact the licensed professional of your choice for advice on your individual situation.

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