What is mortgage protection insurance?
Mortgage protection insurance is life insurance, most often term life, purchased with your mortgage in mind. You choose a coverage amount close to your loan balance and a length that matches the years left on your mortgage. If you pass away while the policy is in force, it pays a death benefit to your beneficiaries. They can pay off the mortgage, keep making the monthly payments, or use the money for other needs.
If you've recently bought or refinanced a home around the lake, you may have received letters about mortgage protection. Those mailings are a good reminder, but you're not limited to the company that sent the letter.
Mortgage protection is not PMI
Private mortgage insurance (PMI) protects your lender if you stop making payments, and you don't choose who it pays. Mortgage protection life insurance protects your family. It's your policy, you name the beneficiaries, and the money is theirs to use as they see fit. Credit life insurance offered through some lenders is also different, because it pays the lender directly.
Who it's a good fit for
- Homeowners whose family relies on their income to make the mortgage payment
- Couples where one income alone would make the payment difficult
- Parents who want their kids 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 death benefit level for the whole term, which can leave extra money for your family as the loan 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 if you're diagnosed with a qualifying terminal, chronic, or critical illness
- A return-of-premium option on certain term policies
- The option to convert to permanent coverage later without a new medical exam, within the policy's rules
Underwriting may involve health questions only or, for larger amounts, a medical exam. Features and availability vary by insurer and state.
Why use a local independent agent
Matt can compare mortgage protection plans from multiple insurance companies side by side, including coverage amounts, terms, riders, and how each company views your health, and explain the trade-offs in plain English. There's no cost to talk and no pressure to buy.
Serving the Lake Norman area
From newer neighborhoods in Mooresville and Troutman to established communities in Cornelius, Davidson, Huntersville, and Denver, Lake Norman homeowners have a lot riding on their mortgage. Matt is local to the area and can help you size coverage to your actual loan. He's also licensed in 16 other states and Washington, D.C., if you or family members live outside North Carolina.
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.