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Premium Highlights

The Value of Mortgage Protection Life Insurance

Popular Mortgage Protection Options

Mortgage Protection Life Insurance Facts

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Premium Highlights October 2019

The Value of Mortgage Protection Insurance

The Most Popular Mortgage Protection Options

Term Life and Return of Premium Term Life Insurance

LEVEL TERM LIFE

If you select a Level Term policy your policy's death benefit will never decrease, and your premium will never increase, regardless of inflation. It will remain level for the entire term period. Because term life policies are the least expensive of life insurance products, purchasing a term policy to protect your loved ones from losing your home in the event of death, disability, and or sickness, is a great option, as it is very affordable. You generally still have to qualify for coverage, but it's typically a simple process. 


RETURN OF PREMIUM TERM LIFE

Just like a standard level term policy, your policy's death benefit will never decrease, and your premiums will never increase, regardless of inflation. You will also receive a 100% return on the premiums you've paid into the policy throughout the policy's initial term. This is quickly becoming the most widely selected Mortgage Protection Insurance option because of its refund like quality if you outlive the selected term.

Mortgage Protection Insurance Facts

Difference Between Mortgage Protection Insurance and Private Mortgage Insurance

 

If you own a home and are paying a mortgage but do not have MPI (Mortgage Protection Insurance), you're putting yourself and your loved ones in a pretty tough position should you pass away. PMI (Private Mortgage Insurance), which is generally required when you buy a home with less than 20% down, protects your lender in the event you fold on your mortgage. In other words, if you die they still get paid, but your family gets nothing and could possible lose their home. MPI protects you as the home owner because in the event of an untimely death, severe disability, or a disease that shortens your life expectancy to a year, the policy death benefit be paid to the lender to cover the full balance of the mortgage loan. This generally does not include Homeowner Association fees. 


There are also various types of policies to choose from, but the more common type is called a Decreasing Term, in which the death benefit decreases in conjunction with your decreasing mortgage balance. However, Level Term Return of Premium policies are becoming increasingly used as these policies do not decrease in value for the entirety of the term period, and instead of not getting any money back after paying 20 or 30 years on a Term policy, you'd get back 100% of your premium payments, giving you a nice lump sum of cash at the end of your term if you outlive it. And should you pass away during the term, your beneficiary would receive the entire death benefit, tax free, and use it to either pay off the remainder of the mortgage, supplement income, or use it for whatever purpose needed. 


Pros of MPI: 

  • Mortgage gets paid off 
  • Guaranteed Acceptance meaning you won't get denied coverage
  • Helps if the breadwinner becomes disabled. 

Cons of MPI: 

  • The death benefit decreases every time you make a payment, since the purpose of the amount of the policy is only to cover the expense of mortgage in the event of death. So throughout the years of your term as you make payments, the policy amount reduces to reflect the new mortgage balance. 


To learn more, schedule a Free Consultation with one of our licensed Mortgage Protection specialists today.

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