For homeowners nationwide
MortgageProtectionInsurance
Help protect your home. Leave behind peace, not bills.
Mortgage protection insurance is designed to pay off your mortgage or keep your monthly payments going if life throws the unexpected your way.
- Pay off the mortgage
- Premiums locked in for the term
- Help if you get seriously ill
You insure your house against fire and flood. But the biggest risk to most families’ home isn’t a storm. It’s losing the income that pays the mortgage. Mortgage protection is life insurance set up to pay off or keep paying your mortgage if you die, and with living benefits, it can help if you get seriously ill too.
What is mortgage protection insurance?
“Mortgage protection” isn’t one special product. It’s a way of using life insurance: you choose a death benefit about the size of your mortgage and a length that matches the years left on your loan. If you pass away, the money goes to your family, generally income-tax-free, and they decide how to use it: pay off the mortgage, keep making payments, or cover other bills.
Mortgage protection insurance is confusing. Download this free guide to help.
The Guide to the SMART Mortgage Protection System: how to protect your home, your family and your money, in plain English.
Two ways to protect your mortgage
1. Protection: term life matched to your loan
The most affordable option. Pick a coverage amount close to your balance and a 10, 15, 20, 25 or 30-year term that matches your loan. Premiums stay level for the term. Many term policies also include living benefits for a serious illness.
2. Protection plus an early payoff: permanent coverage
A permanent policy, such as a properly structured IUL, protects your family and can build cash value over time. Years later, some owners use policy loans or withdrawals from that cash value to pay down the mortgage early, while keeping coverage in force.
Match coverage to your mortgage
This matches coverage to your mortgage only. Most families also need coverage for income, debts and college. For the full picture, use the life insurance needs calculator.
Bank mortgage insurance vs. your own life insurance policy
After you close on a home, you'll often get offers for "mortgage life insurance" from your lender or a company that bought your loan information. Here's how that usually compares with owning your own policy:
| Typical lender mortgage life insurance | Your own term or permanent policy | |
|---|---|---|
| Who gets paid | Usually the lender | Your family, who decide how to use it |
| Coverage amount | Often shrinks as your balance drops | Stays level for the whole term |
| If you refinance or move | Coverage may end | The policy stays with you |
| Living benefits | Rarely included | Available on many policies |
| Underwriting | Often little or none, which can mean higher cost | Priced on your health, often lower for healthy people |
PMI (private mortgage insurance) is different again: it protects the lender if you stop paying, not your family.
Who should look at mortgage protection?
- First-time homeowners and new parents
- Couples who need both incomes to cover the mortgage
- Anyone who just refinanced or bought a bigger home
- Homeowners whose coverage through work would end if they changed jobs
What if you get sick instead?
For most families, a serious illness is a bigger threat to the mortgage than death: the income stops, but the payments don't. That's why I look for policies with living benefits, which can let you take part of your death benefit early after a qualifying critical, chronic or terminal illness. What's covered varies by policy, so I'll show you exactly what each option includes, including whether it covers cognitive impairment like Alzheimer's.
Mortgage protection FAQs
How much mortgage protection do I need?
At minimum, enough to pay off your mortgage balance, with a term at least as long as the years left on your loan. Many families add more to replace income and cover other debts.
Is mortgage protection the same as PMI?
No. PMI protects your lender if you stop paying. Mortgage protection is life insurance that pays your family.
Is the death benefit taxable?
Life insurance death benefits are generally income-tax-free to your beneficiaries. There are exceptions, so check your situation with a tax professional.
Can I get mortgage protection without a medical exam?
Often, yes. Depending on your age, health and coverage amount, many people qualify with just health questions.
Protect the home and the people in it
A free 15-minute call. I'll match coverage to your mortgage, show you term and permanent options side by side, and tell you honestly if what you already have is enough. I work with homeowners nationwide.
Educational information only, not tax, legal or financial advice. Life insurance is subject to underwriting and policy terms, and features, riders and availability vary by insurance company, product and state. Permanent life insurance has fees and charges; cash value growth is not guaranteed; policy loans and withdrawals reduce cash value and death benefit, accrue interest, and may cause the policy to lapse or have tax consequences. Living benefits reduce the death benefit, and the amount received is typically less than the amount accelerated. Guarantees depend on the claims-paying ability of the issuing insurer. Cory Levine is a licensed insurance professional serving clients nationwide where licensed.
