RossHelen/Getty Images
Bikes and buildings in Delft, Netherlands, where the author lives.
- I'm from the US but I live in the Netherlands with my Dutch boyfriend. When we decided to buy a house, a colleague urged me to get life insurance. He'd lost his wife young, and her life insurance allowed him to keep his home.
- Turns out, like many Dutch mortgage companies, ours required us to buy life insurance anyway. It ensures that the bank gets paid if one of us dies unexpectedly.
- I don't even notice the 9 euros coming out of my bank account every month - it's worth every penny.
- Life insurance is a smart buy for every homeowner. Get a life insurance quote today from Policygenius »
"Get life insurance. It was the only thing that kept me in the house."
That's what my colleague and friend said to me when I told him my boyfriend and I were buying a house.
He said it with such intensity that went I home that evening and told my boyfriend: "We should get life insurance."
I was 33, healthy, and had given exactly zero consideration to life insurance. In fact, the only thing I knew about life insurance was that it was a common plot point in crime novels, where someone would murder their spouse for a huge sum of money.
My colleague was like me, young and healthy. Then his wife died of breast cancer, leaving him to take care of two autistic children in a foreign country. He wrote about the experience in a memoir, "All The Time We Thought We Had."
I am originally from the United States, but I live in the Netherlands with my Dutch boyfriend and our rescue dog in a nearly 100-year-old rowhouse in the town of Delft, most famous for its blue pottery.
Neither my boyfriend nor I had any idea what we were getting into when we bought our house. I was buying in a foreign country, with rules and norms very different from the US. He was the first in his immediate family to buy a home.
In the end, the advice I got from my colleague didn't matter. Our mortgage company required us to purchase what the Dutch call "overlijdensrisicoverzekering," or term life insurance.
The Dutch are some of the most insured people in the world
Until 2018, nearly 70% of Dutch mortgages obligated their holders to take out life insurance. If you wanted a mortgage with a National Mortgage Guarantee (mortgage insurance from the national government) you had to get the insurance. It guarantees that the bank gets paid if you die.
Protect your family and assets with life insurance. Get a quote today from Policygenius »
Though it is no longer obligatory, some mortgage companies still require homebuyers to purchase life insurance. Many other companies require you to do so if you're putting down less than 20% of the house's value as a down payment.
Everyone I know who has bought a house in the past few years has taken it out. More than half of my peer group carry it, according to the Dutch Association of Insurers.
It isn't surprising. The Dutch are some of the most insured people in the world. They only spend less than Switzerland on insurance premiums every year.
The whole population carries "aansprakelijkheidsverzekering," or personal liability insurance, which is also obligatory. That will cover you if you spill coffee on a friend's laptop or if you scratch someone's car while cycling. (Should you do that while driving, you'd be covered by your obligatory car insurance.) And, of course, everyone carries health insurance, which is also mandated by law.
What our life insurance would cover
The value of our life insurance isn't an astronomical sum. It wouldn't even cover the entire cost of the mortgage. Our mortgage broker told us that we should take out an amount that would bring the value of the mortgage down to an amount each of us could pay by ourselves.
Essentially, the life insurance just offsets what one of us contributes to the household. And, if something happens to both of us, our parents won't be stuck with the bill.
Like with many things during our house-buying process, my Dutch boyfriend easily filled out the multipage life insurance form. His medical history was stored electronically and transferred between his primary care providers.
Meanwhile, no one in my family could even agree how old I was when I broke my arm as a child, let alone every time I'd needed blood drawn or required medicine that I had to take for longer than a week.
In the end, after some supplemental forms and a phone call to the insurance company to reassure them that I had only moved to the Netherlands seven years before and not been living in a cave from birth until my mid-twenties, we were able to secure the insurance.
The premium is small, only 9 euros a month (about $10). I barely notice it when it is automatically deducted from my bank account. The value of the policy decreases over time as we pay down the amount that we owe on the house. It ends in 20 years, together with our mortgage.
I don't think about it very often, but when I do, it's to encourage other people I know who are buying houses to purchase it. I recommend it for the same reason my colleague encouraged me: You don't want to have to worry about money while you're grieving.
Life insurance can protect your family if the unthinkable happens. Get a quote today from Policygenius »
- More personal finance coverage
- 4 reasons to open a high-yield savings account while interest rates are down
- It took less than 10 minutes to open a high-yield cash account with Wealthfront and earn more on my savings
- How to buy a house with no money down
- When to save money in high-yield savings
- Best rewards credit cards
- 7 reasons you may need life insurance, even if you think you don't
Disclosure: This post is brought to you by the Personal Finance Insider team. We occasionally highlight financial products and services that can help you make smarter decisions with your money. We do not give investment advice or encourage you to adopt a certain investment strategy. What you decide to do with your money is up to you. If you take action based on one of our recommendations, we get a small share of the revenue from our commerce partners. This does not influence whether we feature a financial product or service. We operate independently from our advertising sales team.