After all the searching, open houses, and endless mortgage paperwork, you finally bought your first home. Congratulations!

While you’re probably thinking about which throw pillows to buy now that you’re officially a homeowner, there’s one more important purchase that’s worth considering: life insurance.

Life insurance provides financial backup, helping to ensure that your family will have a home, no matter what happens. Here’s what you need to know about protecting your new investment.

Why do new homeowners need life insurance?

If you just bought a house, along with paying necessary expenses like utilities and home insurance, you and your partner are also probably making regular mortgage payments.

Mortgage debt in the U.S. averages $201,811 per household, and banks around the country currently hold about $10 trillion in mortgage debt for family homes. That’s more than national student loan, credit card, and auto loan debt combined.

If something happens to one of you, the surviving partner may struggle to keep up with payments, especially if you’re raising kids or have other debts to pay. Over 25% of households would feel the financial pinch within a month if they lost their primary income earner.

Mortgage lenders may not give you much wiggle room if you’re suddenly unable to make those payments, even if your family is dealing with a sudden loss. Life insurance policies provide a quick, tax-free payout so your family has the cash on hand to stay afloat, without the extra hassle and worry of saving money.

What’s the best type of life insurance to get after buying a home?

For most families, term life insurance is the best choice because of its affordability and flexibility.

Term life is customizable to your needs and budget, making it a good fit if you’ve just made a big purchase.

With policy terms ranging from 10 to 30 years, you can pick the one that would best cover the length of your mortgage. At Fidelity Life, we also offer a wide range of coverage amounts, from $50,000 to $2 million. If you die while the policy is active, your family would receive a cash lump sum to use to cover the mortgage.

It’s also important to have a plan for meeting other financial needs besides your mortgage if the worst happens: everyday expenses, credit card or student loan debts, even future college tuition. To help you figure how much coverage you need, try our Learn and Plan Calculator.

In some cases, mortgage protection insurance (MPI) may be an option, depending on your lender. MPI is a type of insurance specifically designed to help pay off your mortgage if you die, or sometimes if you lose your job or become disabled.

While the protection can be helpful, your death benefit will decrease over time as you pay off the mortgage. MPI also names your lender, not your family, as the beneficiary. That means if you die, your family won’t receive any extra financial support.

Ultimately, term life insurance offers more protection and can give you and your family peace of mind as you embark on a whole new stage of life.

Still have questions about life insurance as a new homeowner?

Looking for the best insurance quotes? Fidelity Life is here to help. Call us to speak to one of our agents or start your online quote today.

At Fidelity Life, our goal is to make life insurance simple, affordable, and understandable for everyday families. This content is intended for educational purposes only. Each post is carefully fact-checked, reviewed, and updated regularly to ensure the information is as relevant as possible.