Most homeowners know that taking the time and spending the money to weatherproof their home against storms and other weather-related calamities is one of the best investments you can make as a Happy Homeowner. But did you know you should also be financially weatherproofing your income? You need to have an income protection plan or insurance policy set in place to protect against the death or disability of any household earner(s).
“Weatherproofing” your income is how you keep your dream of home ownership alive!
Many homeowners believe they no longer need income protection once they’ve paid their mortgage off. In reality, weatherproofing your income is a lifelong necessity because having a reliable income is also a lifelong necessity. And don’t worry, that coverage never runs out once put in place!
Let’s discuss common income risks to your home ownership status and how those risks differ by circumstance.
For younger, first-time homebuyers, the sudden disability or the death of an earner could pose a significant financial challenge that may jeopardize their dream of home ownership. These Happy Homeowners should purchase an affordable disability or life insurance policy to provide financial support should an unexpected accident or death occur.
In the event of a disability, younger homeowners can adhere to the “H.U.G.” budgeting acronym, which stands for Housing, Utilities, and Groceries. Essentially, your first priority should be to financially meet the needs of H.U.G. before spending money on any other expenses. H.U.G. is essential in case of disability. Your insurance policy will pay the mortgage while you’re disabled, and your H.U.G. budgeting will cover other crucial areas.
Suppose a parent wants to protect themself against income loss due to the unexpected death of a spouse. In this case, couples should proactively purchase a good life insurance policy.
For example, I once helped a 40-year-old single father named Bill in this situation. Bill and I sat down to discuss his needs as a Happy Homeowner. I found out that he had no life insurance policy; he thought he didn’t need any coverage because he was young and healthy.
Luckily, I persuaded Bill to set up an affordable life insurance policy that day. Just 21 months later, I was shocked to read Bill’s obituary in the newspaper. While getting dressed to go to work, he suffered a heart attack.
I was sad to hear of Bill’s passing, but I was ultimately relieved that the plan we put in place would protect his son. And that’s just what it did. Thanks to Bill’s responsible planning, his son could stay in the home and still lives there today. The money left over from paying off the mortgage was set aside for his son to buy a car and go to college. In this scenario, Bill left his son with the gift of home ownership and the legacy of being a Happy Homeowner.
I want to ensure that you and your family remain Happy Homeowners no matter what life throws your way. For more advice like what I’ve shared here, download the Happy Homeowner e-book.