Financial planning and insurance

There are many vital parts of our financial plan: estate planning, mortgages, credit cards, and Secured Loans

There are many vital parts of our financial plan: estate planning, mortgages, credit cards, and USA Secured Loans. One area you need to include is insurance. Insurance answers the question, “what if something bad happens?î No one likes to think about insurance. Too many people avoid the topic because they fail to see the advantage.

But there is an advantage! With insurance, you will have peace of mind that their loved ones will be taken care of if they die. So why are you reading about insurance on a site that has to do with loans? Simple. You want to consider insurance to cover your loans. This way, if you pass away, your loved ones will not be saddled with unexpected debt.

If you have a secured loan that your loved ones can’t cover, do not let your assets get seized. That will add tragedy to tragedy for your loved ones!

So how do you know what insurance to get to cover your loans? Or any expenses at all, for that matter? The easiest thing to do is to decide how long a particular expense will exist in your life. Then, get insurance that matches the term of the expense.

For example, any death or estate tax will always be available in your life. You will incur those expenses no matter when you pass away. If you want to give a gift to a charitable organization, make it an available choice. You will always want this choice.

Yet, for many other expenses, including your loans, a temporary solution is better. For example, the mortgage on your house is an excellent loan to create insurance for. The loan on your car is also a good one. This way, if you were to pass away while these expenses are still existing, they will be covered automatically. They will be paid off at your death. You match the term of the loan to the term of the insurance. Thus, you are only buying insurance for as long as you have the loan.

Say you have a secured home improvement loan. It is set to last for three years as you build an addition onto your home. At the same time you take out a three-year term insurance policy for the same amount as the loan.

If you pass away in the second year, the insurance pays your loved ones the full loan amount. They can use two thirds of it to pay the remaining part that is still outstanding on your loan.

People do this for many loans. These include their mortgage and their automobile loans. They also include any other loan they have. It’s an excellent way to guarantee that your loved ones will not carry debt. This protection helps if tragedy should strike.