House Insurance: Do You Have Proper Coverage?

Is your house insurance adequate? Many insurance policies have automatic escalator provisions that periodically boost the coverage.

Make sure the replacement value of your house meets industry standards, so you will not suffer a financial loss if your house is destroyed.

Some people purchase mortgage life insurance so that in the event of death, their mortgage would be paid off in full. Many financial advisors say such a policy doesn't make sense. Usually, you are required to pay an annual or monthly premium on the full amount of the original mortgage, when, in fact, the outstanding mortgage debt decreases each year. In addition, many people do not stay in the house after their spouse dies. Thus, when the house is sold, the mortgage will be paid off from the sales proceeds. Better investment opportunities exist rather than having to pay the premiums for mortgage life insurance. At the very least, you can use that money to buy additional life insurance - and you will no doubt get more coverage.

Planning can save considerable aggravation, frustration and expense for your family in the long run. So check your home insurance policy to make sure things are in order, and you have adequate coverage.

As with any financial advice or tips we give on this site, you should ALWAYS consult with your own personal advisor or financial planner.