Life Insurance After Buying a Home: A Checklist

Why a home purchase changes the picture

Before the purchase, your family may have been able to move somewhere smaller if an income was lost. After it, there is a fixed payment every month for decades. Coverage that was enough before the mortgage may no longer be enough.

1. Write down the numbers

Your loan balance, the monthly payment including taxes and insurance, and the number of years left. These three figures are the starting point for any conversation about coverage.

2. Check what you already have

List every policy you own, including any through an employer. Note each amount and when it ends. Remember that employer coverage often ends when the job does, and may be smaller than it appears next to a mortgage.

3. Decide what you would want to happen

Would you want the mortgage paid off in full, or enough income for your family to keep making the payment? Would a surviving spouse stay in the home or sell? There is no right answer, but the answer changes how much coverage to consider.

4. Think about both incomes

If two incomes pay the mortgage, both matter. So does the work of a parent who stays home, because replacing childcare has a real cost.

5. Know what your other policies do not cover

Homeowners insurance covers the building and your belongings. Private mortgage insurance (PMI), if your lender required it, protects the lender. Neither one pays your family if you die.

6. Update your beneficiaries

A home purchase often follows other changes: marriage, children, a move. Check that the beneficiaries named on each policy are still the people you intend.

7. Review it again when things change

Refinancing, a new child, a raise or paying down the loan can each change the amount you need. Many people look at their coverage again after any of these.

A licensed professional can go through this checklist with you and show how different amounts and policy types compare for your situation.