It is not a pleasant subject, but also a bit of elephant in the room because we all will face it. And (luckily for whom it happens!) usually unexpected. But at such a moment the surviving relatives are confronted with the harsh recognition of your financial past. Perhaps you have a partner, there are children or others who you wish a carefree financial future for. But what situation will they encounter?
Wait with clicking away: there will also be good news.
If you are not alone in this world, chances are that others will also have to eat from your salary, or that the mortgage or rent must be paid from it. So if your income is lost, being able to pay fixed costs comes under pressure. We have long held the principle that your next of kin should also continue to live comfortably, so urge our customers to insure the risk of death.
Please wait for that good news.
Strangely enough, financing conditions in the Netherlands were eased not too long ago. It is no longer an obligation, not even with a mortgage under the National Mortgage Guarantee, to have (the top of) your mortgage repaid by the proceeds from a term life insurance policy. So what happens: hordes of mortgage customers no longer seem to take pne out on their own. Certainly with one of the busiest refinancing markets in years, many “covered obligations” will lapse. Now the Dutch regulator AFM is has noticed and many are outraged the relaxation of rules should not have this effect. Duh.
The price of term life insurance policies has fallen sharply in recent years (unless you have something chronic that really involves increased medical risk). So insurance is financially tolerable and useful. And most mortgage providers often give an heir the opportunity to repay the mortgage without penalty within 6 months. So a big chunk of fixed costs is immediately removed for your relatives. One less worry anyway!
Check whether your bank also has this penalty-free repayment option. It makes a difference but is not the main reason why you should do this. If you want to know how this can help your financial plan, you are welcome with us.