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Is Mortgage Protection Required
Is mortgage protection insurance required? Mortgage protection insurance isn’t required. However, it is not the same as private mortgage insurance (PMI), which many banks or lenders require you to buy.
- updated last on April 11, 2023
Is mortgage protection insurance worth it
Is mortgage protection insurance required and worth it for homeowners? Yes. Mortgage protection insurance usually offers a non-medical issue term life insurance policy that provides broader coverage for a few people with some minor health issues and often comes at a lower cost than traditional term life products that require a medical exam.
God forbid you to pass away. Will your family be able to stay in your home and keep up with the mortgage payments? This is a significant concern for most people whose income is essential to making their families’ mortgage payments.
If you’re concerned about being unable to pay the housing bill if something happens to you, you may be considering mortgage protection insurance.
Mortgage protection insurance at Coach B. Insurance is a unique insurance policy designed to pay off your mortgage with the mortgage company. We set it up to where the death benefit will go to a beneficiary of your choosing instead of directly to the mortgage company. This gives the family more options regarding what to do with the benefit.
Typically, the insurer pays off the remaining mortgage balance directly to your lender as a lump sum when you pass on. With our option, your family can choose whether to pay off the mortgage or pay other debt like cars, credit cards, funerals, any final expenses, etc.
While all insurance plans have pros and cons, mortgage protection insurance can be a good bargain because it’s more flexible than a typical term life policy. Some riders include disability and return of premium; that’s where if you live for the term of the policy, you get all your money back.
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Coach B. saves you up to 60% by comparing the top-rated companies on our quote and apply platform.
Who sells mortgage protection insurance
Your home may be your family’s most significant asset. And their most extensive financial responsibility. A good mortgage protection insurance policy can help them remain in your home after you’re gone.
Read on to help protect your house and family with mortgage protection insurance and term life insurance. Here are some of the carriers we use here at Coach B. Insurance for mortgage protection.
SBLI –ASSURITY-GERBER-KEMPER-AIG-FORESTERS-MUTUAL OF OMAHA-NORTH AMERICAN-AMERICO
Mortgage protection insurance in case of death
In case of death, mortgage protection insurance pays a portion or all of your mortgage if you die. Depending on the policy, mortgage insurance may pay off the entire mortgage, a piece, or for a period, such as five years. The longer the length and size of the payoff, the more you’ll pay in premiums.
Mortgage protection insurance has evolved. It used to be that your death benefit would be your mortgage’s outstanding balance. Today, companies design most mortgage insurance policies to pay out the total amount of your original mortgage, no matter how much you owe. The beneficiary can then use the remaining money for anything.
If you pay off your mortgage early, you keep the coverage until your policy term expires. Some insurers will allow you to turn that mortgage insurance into a life insurance policy.
You can also add riders to help with living benefits. These benefits could help pay your mortgage if you become disabled and can’t work or lose your job. For instance, you could add a long-term disability rider that pays up to 60% of your income to help your bills if you become disabled and can’t work. Adding riders usually increases your premiums. However, riders can help you customize a policy that works for you.
Mortgage protection cost and benefits
When figuring out mortgage protection insurance premium costs, insurance companies consider:
● Your age
● Smoking status
● Length of time and amount left on the mortgage
● Whether the policy covers both spouses
Let’s take a look at possible costs. If you have $150,000 left on your mortgage, you may find a mortgage insurance policy with bare minimum coverage of $50 a month. Adding riders, such as the return of premium and living benefits, can increase monthly premiums to $150 or more on that same $150,000 amount.
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Mortgage protection insurance calculator
Enjoy peace of mind with Coach B.’s flexible options and affordable coverage. Life and Critical Illness Insurance can help protect your mortgage balance, while Disability can help protect your mortgage payments.
Our handy quote and apply mortgage protection insurance calculator allows you to view your insurance premium quote based on your selected coverage options.
Mortgage protection insurance for seniors
Mortgage protection life insurance for seniors is a great way to get life insurance between 50 and 80. It comes in small amounts to help pay for any remaining mortgage balances and final expenses you will incur after you’ve passed away. Helping your loved ones cover the costs of the mortgage, a funeral, or any medical bills left behind is crucial. Since it could be a term or a whole life policy, it provides coverage and premiums that never change either for the term or if the whole life is until you die.
In this day and time, many insurance carriers have designed new products with seniors in mind and are now more affordable and made easier to get covered with:
- A simplified application process
- No required medical exam
- Only a few health questions to help determine eligibility
Mortgage protection insurance cost and benefits
Mortgage protection insurance benefits can give you the financial confidence that your family will have some financial stability in your absence. Generally, the more life insurance coverage you have, the more benefits it can provide to your family and loved ones when needed.
For example, most people will receive a nominal amount of life insurance – say $20,000 – through their place of employment. While that theoretically may sound like a nice sum of money, in today’s times, it may only be enough insurance to cover funeral expenses and maybe a couple of mortgage payments. But with a more significant face amount of coverage, your family can realize far more benefits, such as:
- Income replacement lost salary
- Paying off the home mortgage
- Paying off any other debts, like car loans, credit cards, and student loans
- Providing money for your kids’ college education
- Helping aging parents with care
Beyond your mortgage insurance face amounts, different kinds of policies can provide other benefits as well:
- Mortgage protection insurance has tax advantages because death benefit payouts are generally tax-free.
- Some policies could have a cash value account that accumulates over time and can be used to pay premiums later or even tapped into to help live in retirement.
- Mortgage insurance offers additional riders like disability and critical illness to replace a portion of your salary if you cannot work.
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Frequently Asked Questions
Is mortgage protection required?
Mortgage protection insurance isn't required. However, it is not the same as private mortgage insurance (PMI), which many banks or lenders require you to buy.
Is it a good idea to buy mortgage protection insurance?
It depends on your circumstances and financial goals. Mortgage protection insurance could provide peace of mind and economic security for you and your family if you cannot pay due to illness, injury, or death. However, it may not be necessary if you already have good life or disability insurance coverage. It's essential to weigh the costs and benefits and consult a financial advisor before deciding.
How do you know if you have mortgage protection insurance?
To find out if you have mortgage protection insurance, start by reviewing your mortgage documents and contacting your lender or insurance provider. You can also check your bank statements to see if you have been paying premiums for mortgage protection insurance.
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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