What mortgage protection insurance is
Mortgage protection is life insurance, usually term life, bought with your mortgage in mind. You pick a coverage amount close to your loan balance and a length that matches the years left on the loan. If you pass away while the policy is in force, it pays your beneficiaries, and they decide whether to pay off the house, keep making payments or use the money for something else.
If you've bought or refinanced a home recently, you have probably received mail about mortgage protection. Those letters are a useful reminder, but you aren't limited to the company that sent them.
Mortgage protection is not PMI
Private mortgage insurance (PMI) protects your lender if you stop paying, and you don't choose who it pays. Mortgage protection life insurance protects your family. You own the policy, you name the beneficiaries and the money is theirs to use. Credit life insurance offered through some lenders is different again, because it pays the lender directly.
Who it fits
- Homeowners whose family relies on their income to make the house payment
- Couples who would struggle to cover the mortgage on one income
- Parents who want their children to be able to stay in the same home and schools
- New homeowners and anyone who recently refinanced
How it works
Most mortgage protection is term life insurance with a term such as 15, 20 or 30 years. Some policies keep the benefit level for the whole term, which can leave extra money for your family as the balance drops. Others use a decreasing benefit that follows the loan. Depending on the insurer, plans may also offer:
- Living benefits that let you access part of the death benefit early after a qualifying terminal, chronic or critical illness
- A return-of-premium option on some term policies, at a higher cost
- A conversion option to permanent coverage later without a new exam, within the policy's rules
Underwriting may be health questions only or, for larger amounts, include a medical exam. Features and availability vary by insurer and state. Weighing your options? Read Mortgage Protection vs. Term Life Insurance: What's the Difference?
Why work with an independent broker
Matt can put mortgage protection plans from several insurers side by side, including coverage amounts, terms, riders and how each company views your health, and explain the trade-offs in plain English. There is no cost to talk and no pressure to buy.
Serving Mooresville and the Lake Norman area
From newer neighborhoods in Mooresville and Troutman to established streets in Statesville, Cornelius, Davidson and Huntersville, homeowners around the lake have a lot riding on the mortgage. Matt is based in Mooresville and can help you size coverage to your actual loan. He's also licensed in 16 other states and Washington, DC.
Mortgage protection insurance is life insurance and is subject to underwriting and eligibility requirements. Riders, living benefits and availability vary by insurer and state. It is not affiliated with your lender or any government agency.