Norton Secured powered by digicert A white woman happily watches a smiling young white toddler run down a driveway in front of a yellow house. Life insurance can help your loved ones stay in their homes even after you pass away. Find out how.

Navigating Life Insurance

How Life Insurance Can Help Your Loved Ones Keep Their Home

When a loved one passes away, they can leave behind a lot of expenses. In some situations, the loss of a family member can mean the loss of income, which can mean their family has to find a new place to live. Life insurance is one of many smart ways to help protect your loved ones financially after you pass away, and that includes helping them stay in their home.

So can life insurance be used to help pay for housing expenses like rent or a mortgage? We’ve got the answers that can help you keep your family in their home after you’ve passed away.

What Can Life Insurance Help Pay For?

A life insurance policy’s death benefit can be used for any reason, once it’s received by the beneficiaries. This means it can be used to help pay for things like a college fund for the kids, funeral expenses, medical bills and even house payments.

If your passing would mean a loss of income for your loved ones, a life insurance death benefit could help replace some of that income, allowing your family to maintain a similar standard of living. This can be a big relief to loved ones in a tragic time.

Can I Use Life Insurance to Pay Off a Mortgage?

Depending on how much life insurance you’ve purchased, your policy’s death benefit may help with mortgage payments. This can be very helpful to loved ones who may not be able to afford to remain in their home due to lost income after you’ve passed away.

If you have a large enough cash value life insurance policy and have accumulated enough cash value, you may be able to take out a loan against your death benefit while you’re still alive to help pay for expenses.* This loan would accrue interest like a regular loan.

If you pass away before the loan is paid back, the remainder of the loan and any interest will be subtracted from the death benefit and won’t be paid out to your beneficiaries. Whether or not it’s a good idea to take out a loan is a question for your financial advisor, so be sure to reach out to a trusted professional before making this decision.

To make sure you’ve got enough life insurance, check out our life insurance calculator to find out how much you should consider purchasing.

What Type of Life Insurance Can Help With Mortgage Payments?

Any type of life insurance policy’s death benefit can help pay down a mortgage or other housing expenses. The type of life insurance you choose depends on your individual situation. Consider factors like your income, your partner’s income, your monthly expenses, any debts you have and the potential cost of funeral expenses when considering life insurance.

Reach out to an American Family Insurance agent to talk about your life insurance needs. They can help you select the right insurance policy for where you are in life. And they’re experienced at helping you calculate just how much life insurance you need to help protect what matters most.

*Any loans taken from your life insurance policy will accrue interest. Any outstanding loan balance (loan plus interest) will be deducted from the death benefit at the time of claim or from the cash value at the time of surrender. If the loan balance grows too large for the cash value to support it, the policy could terminate.

Policy Forms: ICC18-33 (10), ICC18-33 (15), ICC18-34 (20), ICC18-35 (30), L-33 (10)(ND), L-33 (15)(ND), L-34 (20)(ND), L-35 (30)(ND), L-33 (10)(SD), L-33 (15)(SD), L-34 (20)(SD), L-35 (30)(SD), ICC18-36 (10), ICC18-36 (15), ICC18-36 (20), ICC18-36 (30), L-36 (10)(ND), L-36 (15)(ND), L-36 (20)(ND), L-36 (30)(ND), L-36 (10)(SD), L-36 (15)(SD), L-36 (20)(SD), L-36 (30)(SD), ICC17-225 WL, L-225 (ND) WL, L-225 WL, ICC17-227 WL, L-227 (ND) WL, L-227 WL, ICC21 L141 MS 01 22, L141 ND 02 22, L141 SD 02 22

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Related Topics: Buying Life Insurance , Cash Value , Whole Life , Term Life