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Mortgage Protection Insurance Scams
This article will help you answer the question, “Is Mortgage protection insurance a scam.” If you recently purchased or refinanced at home, you may be surprised by all the mortgage protection offer letters you received in the mail
- updated last on April 11, 2023
Is mortgage protection insurance scams real
“Is Mortgage protection insurance scams real?” Maybe this will help you answer the question, and if you recently purchased or refinanced a home, you may be shocked by all the mortgage protection offer letters you received in the mail.
These unsolicited offers coming to your mailbox for mortgage protection insurance are, at best, an annoyance to many new home buyers and anyone refinancing their home. Also, it can be confusing to many homeowners as well. It is not a payment protection insurance scandal.
It is not unusual for people to wonder, “is mortgage protection insurance a scam?” after getting their 15th letter in 30 days.
How do these companies get my personal information?
Your recent home purchase or refinance is public information that can be purchased or accessed through general information data requests at the courthouse.
Mortgage protection insurance companies use publicly available data to contact homeowners immediately after their purchase information becomes public records to offer them mortgage protection insurance.
Mortgage protection policy
Many mortgage protection plan policies will work similarly to how traditional life insurance policies work. Every month, you pay the insurer a monthly premium. This premium will keep your coverage current and ensures your protection will stay in effect. If you happen to die during the policy term, the insurance carrier pays out a death benefit covering a set number of mortgage payments.
Your policy’s limitations and the number of monthly payments your policy will cover come with the policy’s terms. Many policies agree to cover the remaining term of the mortgage, and some now are fixed on set term lengths of 10-15-20-30 years, but this can vary by insurer. Like any other type of insurance, shopping around for policies with an independent agent and comparing carriers before buying a plan is ideal.
First, with a mortgage protection insurance policy through Coach B. Insurance, the beneficiary of an MPI policy will be your family. That is typically not the case with other types of mortgage protection. It’s the mortgage company. If you happen to die, your family doesn’t see a lump sum of cash or the death benefit like they would with a typical term life insurance policy. Instead, the money goes right to your lender. If you go with a Coach B. mortgage life insurance policy, your family will get the lump sum and choose who is the beneficiary and can spend the money however they please.
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Mortgage protection department
If you have recently closed on a mortgage or home equity line of credit, you’ve probably received many solicitations for mortgage protection insurance. It usually comes disguised as official communication from your mortgage lender or mortgage protection department with few details on what they’re selling.
Mortgage protection insurance (MPI) is a type of life insurance designed to pay off your mortgage if you were to pass away — and some policies also cover mortgage payments (usually for a limited period) if you become disabled.
Note: Don’t confuse mortgage protection life insurance with private mortgage insurance (PMI), which protects the lender if you default on the loan. With PMI, your family would still owe the loan balance if you passed away.
Keep the family home in the family with mortgage protection services
The surefire way to be there for your family, and you want to make sure they’re taken care of after you’re gone. In the event of your sudden passing, your family income will be reduced, and expenses can start to pile up, the largest usually being the home mortgage.
Mortgage Protection Services from Coach B. Insurance is a simple and affordable way to protect your family against the considerable financial burden of an outstanding mortgage in your untimely death by paying off the policy’s remaining balance or face amount. With the right insurance coverage, your family can continue living in the house they’ve come to call home.
Talk with an insurance specialist at Coach B. Insurance to see if Mortgage Protection Insurance is right for you and discuss other Life Insurance options to give yourself peace of mind knowing your family can stay in their home.
Mortgage protection card in mail
Those records become public information when you get a new mortgage or refinance a mortgage. Meaning that parties interested in selling you products and services can get that data on you quickly from your deed recording within a week or two after closing. This information includes things like:
- mortgage lender
- the borrower (you)
- loan amount
- loan number
- property address
Because this information includes the lender, companies are trying to deceive you and may try to sell you insurance or services and represent themselves as the lender.
You may also get offers by card or letter for a couple of different types of life insurance. These cards and letters aren’t mortgage protection insurance junk mail, but it’s up to you if you want to take advantage of these offers. I suggest you talk with an excellent independent life agent at Coach B. Insurance about your mortgage protection needs.
Some mortgage life insurance policies offer a disability rider that takes effect if an unexpected life event like an injury or illness causes you not to be able to make a couple of mortgage payments. The disability policy kicks in and makes the payments for you. Life insurance death benefit pays a death benefit to your loved ones if the person named in the policy passes away.
While these life insurance policies in and of themselves aren’t always a bad thing, companies may try to present them as if the lender is offering them to get you interested in their insurance offer. If you’re considering a mortgage protection policy, look for a company like Coach B. Insurance that is honest about who they are and can offer many choices.
Mortgage protection division
If you just purchased a new home and now have a mortgage or refinanced your home. You will receive many pieces of mail looking like they came from your lender. Please read the fine print and see that its’ just information that is the public record from the courthouse.
It will often come with a return envelope addressed to Mortage Protection Division at some PO Box. Here at Coach B. Insurance, we offer all the same mortgage protection products, but we don’t have to come to your house; we can do the entire process online. Oh, they’re super affordable too.
When you purchase mortgage life insurance protection insurance with Coach B. Insurance either online or with the support of our licensed agents, you will have peace of mind, knowing that your loved ones wouldn’t be burdened with mortgage payments if you pass away or face income loss due to a critical illness or disability.
Choose to protect your family from losing your home, and start your mortgage protection processing application today.
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If you are ready to get coverage now, our application takes less than ten minutes.
Types of mortgage frauds
Some common types of mortgage fraud include occupancy, income, appraisal, and straw buyer fraud. Occupancy fraud involves misrepresenting the property’s intended use, while income fraud involves falsifying income information. Appraisal fraud consists of manipulating the property’s value, and straw buyer fraud involves using a third party to purchase the property on behalf of the actual buyer.
Frequently Asked Questions
Is mortgage protection plan legit?
Mortgage protection insurance can be a legitimate way to protect your home and family in case of unexpected events such as job loss, disability, or death. However, it's essential to carefully review the terms and costs of the policy to ensure it's the right fit for your needs and budget. Be wary of scams or high-pressure sales tactics from unscrupulous providers.
Why do I keep getting mortgage protection letters?
Mortgage protection letters are typically sent to homeowners who have recently purchased a home or refinanced their mortgage. Insurance companies or mortgage lenders often send these letters and offer protection if the homeowner cannot make their mortgage payments. While these letters may be helpful for some homeowners, they are only necessary for some and should be carefully considered before making a decision.
Do I have to pay for mortgage protection insurance?
Yes, mortgage protection life insurance typically requires payment of premiums to maintain coverage. However, some lenders may offer the option to include the insurance cost in your monthly mortgage payment. It is essential to carefully review the terms and expenses of any mortgage protection life insurance policy before deciding.
About Coach B.
After starting his financial career with Phoenix Home Life Insurance Company back in 1992, Scott decided he wanted to provide people with an easier and more enjoyable way to buy life insurance. That was the start of Coach B. Life Insurance, whose mission is to be transparent, honest, and helpful to customers — without ever bugging or pushing them.
In the years since then, he has worked tirelessly to improve the process of shopping for insurance. His goal is to make sure that everyone who comes to Coach B. — whether they end up buying a policy or not — has the best possible experience.
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