Worried About Getting Soaked On A Rainy Day? Try Umbrella Liability Insurance

With the slow death of company pension plans and the paltry compensations offered by the US government’s social security program, many older Americans are finding themselves strapped for cash. Longer life expectancies, while clearly desirable, aren’t helping the matter of keeping US senior citizens on a more stable fiscal footing: the longer you live after retirement, the thinner those retirement savings are going to have to be stretched.

As a consequence, those adults over 65 who are fortunate enough to own their own homes, are increasingly looking to their dwellings for extra money. What are the traditional means of turning your real estate into liquid assets? Second mortgages, reverse mortgages, and home equity loans. However, these can be risky–and costly–expedients. Reverse mortgages come with fees that end up costing the homeowner over $10,000 from the get-go.

Now, an alternative way of deriving money from your property has been devised. EquityKey, a financier from San Diego, CA that is affiliated with the Belgium-based KBC Bank, is one of the first lenders to start offering this new option.

What is EquityKey’s innovation? The company offers certain senior citizens the chance to receive money in exchange for a percentage of however much their home increases in value over the years.

To qualify for EquityKey’s new program, a homeowner must be between the ages of 65 and 85. The homeowner must have a high credit rating, and must reside in homes worth at least $400,000 in the current housing market (that figure is higher for the states of New York and California). They need not even have paid off their mortgages on these homes.

Homeowner who have met these criteria can receive loans of up to 15% of their home’s equity (which, again, can be significantly less than the $400,000 minimum market value of the home). They have to stay in the home for at least 10 more years, or else return the entire value of the loan. If the homeowners fly the coop after only 5 years, they can even expect to have to pay back the full loan plus a 5% penalty.

After 10 years, as soon as the homeowners sell the homes–or as soon as their heirs sell the homes, upon the elderly homeowners’ deaths–EquityKey must receive 50% of however much the home has increased in value. What makes this arrangement so attractive is that the homeowners, or their heirs, only pay so long as their home has gone up in value. If the homeowners take leave of this world before 10 years have passed since the signing of the agreement with EquityKey, their heirs owe nothing. Moreover, so long as the home remains in the possession of the original homeowners or their heirs, EquityKey is owed nothing.

How is such an arrangement possible? The answer is that EquityKey buys life insurance for the homeowner who participates in its innovative program, as soon as the deal is signed. If the homeowner dies within a certain time frame, EquityKey collects the life insurance.

Recent Additions:

• Five Causes Of Rising Life Insurance Premiums
• Bernanke Favors Low Interest Rates, Pushes for Broader Economic Regulation
• A Brief Introduction To Homeowners Mortgage Insurance
• Finding Good Auto Insurance That’s Right For You
• Connecticut Regulators Warn Drivers: Auto Insurance Fraud Risks Money and Lives