Archive for the ‘ Insurance ’ Category

Mortgage Life Insurance

Life Insurance is a way to protect your family in the event of an untimely death with future financial support.  One way to protect your family’s future is to purchase Mortgage Life Insurance.  It is a type of insurance that is designed to protect a family’s home in the event that the borrower passes away.  If a policy is in place while the borrower/mortgagor passes away, the outstanding balance of the mortgage will be paid by the policy.

This type of policy is not the same as a traditional life insurance policy.  A traditional life insurance policy pays a death benefit to the surviving beneficiaries when the named insured passes away.  The Mortgage Life Insurance policy only pays out if the policy is in place while the mortgage itself is still outstanding.

There are two types of Mortgage Life Insurance policies that are typically offered.  The first being decreasing term insurance and the second being level term insurance.

  • Decreasing Term Insurance:  A type of life insurance where the death benefit on the policy decreases over the term of the policy.  This amount typically matches the mortgage loan term.  The premiums are fixed throughout the life of the policy even though the death benefit decreases each year.  The premiums are usually lower then a Level Term policy.

Example: A married couple with three children has a $250,000 mortgage for 30 years; you should get a 30-year term life insurance policy in the amount of two hundred and fifty thousand dollars which names your spouse as the beneficiary. In case of your death, your spouse can pay off the mortgage, and your family does not lose the home.

  • Level Term Insurance:  A type of life insurance where the death benefit on the policy stays the same or level for the life of the policy.  The starting amount typically will coincide with the mortgage balance and unchanged throughout.  The premiums are usually higher then a Decreasing Term policy and stay the same throughout the life of the policy.

Example:  You are married and have purchased a new home with a mortgage of $150,000 for 20 years; you should get a 20-year term life insurance policy in the amount of one hundred and fifty thousand dollars which names your spouse as the beneficiary.  In the case of your death, your spouse can pay off the mortgage, your family does not lose the home and there may be some money left over for the beneficiary.

Submitted By: Nick Hage, Assistant Manager/Agent for Citizens David Hirth Agency

Investment and Insurance products:

  • Are Not Insured by the FDIC or any other federal government agency
  • Are Not deposits of or guaranteed by a Bank or any Bank Affiliate
  • May lose value

Personal Umbrella Policy

During certain circumstances, basic insurance is not enough. That is why a Personal Umbrella Policy (PUP) is a necessary addition to insurance protection for most people.

If an unfortunate accident should happen that is your fault, do you have enough liability insurance from your current policies to cover your costs for negligence? Since no one can predict how much a judge may award the injured person, umbrella insurance is not just for the wealthy, but a needed protection for every policyholder.

Umbrella insurance is designed to give added protection above and beyond the limits on homeowners, auto and watercraft personal insurance policies. With an umbrella policy, an additional $1-5 million can be added for liability protection. This protection is designed to “kick-in” when the liability on other current policies has been exhausted.

Listed below are actual claims. These claims show the very real consequences of situations that quickly exhaust underlying liability limits and threaten the net worth of the people involved.

Claim Scenario:

The Insured’s 18-year-old son was driving the Insured’s car on a short trip to the store with his girlfriend, the Claimant. The car left the roadway and struck a tree. The Insured’s son told the police that a vehicle cut him off, but there were no witnesses and no evidence of any impact with another car. The Claimant has no recollection of the accident.

The Claimant, a 19-year-old college student, was hospitalized for over a month with multiple fractures and internal injuries. She was in a wheelchair, but is now able to walk with crutches and continues with physical therapy. She has a right foot drop as a result of the injuries. The Insured’s personal umbrella policy limit was paid.

Claim Scenario:

The Insured hosted a party at his home. Among the guests was the Claimant, a family friend. The Claimant brought his wife and children, an infant and 2 year old child to the party.

The Insured gave the Claimant a jug of spring water for him to use to mix the formula for the infant. The 2 year old child also had a drink.

Shortly thereafter, both children became ill. The family left the party, and took the children to the hospital. The hospital requested the water jug which was found to contain arsenic. An old label was found wrapped around the handle with the word “weed killer” printed on it.

The Insured had apparently mixed a solution of weed killer in a jug similar to the ones used for spring water and mistakenly given it to the Claimant.

The infant died and the 2-year-old survived after being in critical condition. The Personal Umbrella policy limits were paid out.

For more information on the Big I endorsed RLI Personal Umbrella, check it out today at www.iiaba.net/umbrella.

By: David Hirth & Deb Raschke of Citizens David Hirth Agency

 

Investment and insurance products:

  • Are Not Insured by the FDIC or any other federal government agency
  • Are Not deposits of or guaranteed by a Bank or any Bank Affiliate
  • May lose value
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