Life insurance and mortgages: what to know

Save for getting married or having kids, there are few commitments you can make that are as big as a mortgage. Nothing says “adult” quite like signing up for a 30-year loan. There’s the whole committing-to-a-large-physical-structure part, but really, it’s the money. Houses are expensive. About a third of the average US household’s expenditures in 2019 went to housing. In dollars and cents, that was $20,679 a year.

So we’re just going to say it: If you’ve got a mortgage, you need life insurance.


There’s the obvious reason: the size of that mortgage. With relatively low interest rates, home loans allow us to buy properties we’d spend decades saving for. While a mortgage makes expensive houses affordable, it also puts a lot of debt on the books. If you pass away, your survivors will be on the hook for that debt—but they won’t have your income anymore.

But as with most things in the world of home ownership, the mortgage is just the beginning. Not to put too fine a point on it, but here are seven more reasons why mortgages and life insurance policies should go hand in hand.

Property taxes

As actor-playright Christopher Bullock once said, “Tis impossible to be sure of any thing but Death and Taxes.” It should come as no surprise that even death won’t stop taxes. That’s why having cash on hand—in the form of a life insurance payout—can take a little bit of stress off your loved ones’ plates.

Homeowner’s insurance

Yes, we are in fact stating that you need insurance to pay for insurance. Homeowner’s insurance is a given, whether your house is paid off or not. The unforeseen can be very expensive, after all. You wouldn’t let your policy lapse for yourself, and you certainly wouldn’t want it to lapse for your survivors. That could lead to untold headaches for them, so make sure they have what they need to make sure this bill gets paid.

Homeowners’ association fees

Love it or hate it, if you’ve got an HOA, you’ve got their fees. Despite the friendly, optional-sound ring of the word “association,” these monthly, quarterly, or annual payments are pretty much unavoidable. So, yeah, add this one to the pile.


A house isn’t much good if the lights don’t turn on. Or the stove won’t light. Or the internet’s out. So remember that if you have loved ones who will be staying in your home, they’ll have an assortment of related bills to cover on their own, every month.


Unless you bought a fixer-upper, a small part of you probably thought, the hard part’s over, when you first walked into your new home. And you were likely divorced from that notion the first time you called a plumber at 2 o’clock in the morning. It’s a fact that houses need regular cash infusions to keep them running smoothly. From the things that break down, leak out, or start making weird noises, to the parts that desperately need updates, maintenance is real—and can be real expensive.

Emergency fund

This is something of the opposite of credit card debt. Like credit card debt, an emergency fund could cover the categories above, but instead of what you’ve spent in the past, it’s for the future. Having this money available acts as insurance against the unknown—losing a job, unexpected illness, anything that could keep your loved ones from paying the bills.

Credit card debt

Okay, credit card debt isn’t strictly home-related. But with utilities, maintenance, and renovations possibly paid on your cards, there’s a possibility some of your balances are connected to your home. Regardless, your mortgage can help bring the weight of credit card debt into focus. The average 30-year fixed mortgage rate stands at about 3%, while the average credit card interest rate is hovering around a hefty 20%. So if you’re taking care of that low-interest mortgage, you really should make sure your survivors can wipe out the super-pricey credit card debt—home-related or not.

Mortgage and life insurance, the perfect couple

If it wasn’t clear before, by now it should be obvious. Once you get a mortgage, it’s time to get life insurance. And with all the complexities of home ownership, we wouldn’t blame you if you’d want to make getting a policy as simple as possible. Don’t worry—we’ve got you covered. Get a Ladder term life policy quote in just a few minutes, and we’ll help make at least one part of home ownership—your life insurance—easy.

About The Author