Understanding what mortgage protection insurance is and what it is not can help you decide if you need this type of life insurance policy. If you die, would you want the balance of the mortgage to be paid off, leaving your family with a free and clear house? If so, then a mortgage protection plan is what you need.

In this article, we will go over mortgage protection cost, which companies are best and how to get quotes for this type of plan.

Plus we include a few tips and tricks on how you can pay off your mortgage 7-8 years early.

What is mortgage protection insurance?

Mortgage protection insurance is nothing more than a term life insurance policy used to pay a death benefit to a beneficiary. The beneficiary has the option to use the money as they choose. Some beneficiaries may elect to pay off the mortgage, and some may not. Regardless, mortgage protection life insurance leaves your loved ones with options

Mortgage protection life insurance can be more than just life insurance. You can add riders to this type of policy to help pay your mortgage payment in part if you lose your job or become disabled or chronically ill. And if you die, the balance of the mortgage will be paid, leaving your family with a free and clear house.

What mortgage protection insurance isn’t.

PMI (private mortgage insurance)

Protection from unemployment

Protection from a disability

Protection from chronic illness

Protection from critical illness

How much does mortgage protection insurance cost

Like most life insurance policies, multiple factors go into pricing the policy. The primary factors are your age, gender, state, health, product type and coverage amount.

Most people apply for enough coverage to cover their mortgage balance. So then if you have a large mortgage you will need more coverage which will lead to a higher cost.

Every company can price differently for each risk factor. Some companies are better suited to tobacco users. Others excel with customers who struggle with their health. If you are young with perfect health, we can find the best carriers for your niche as well.

Learn more: All the factors that make up the cost of life insurance

You don’t have to guess what the cost will be. We built a quote engine to instantly compare rates from the top companies in the county. It’s the simplest quote form you will ever use and it provides instant rates after you enter some basic information. You can run a full quote in the widget on the sidebar of this page.

How to pay off your mortgage early with life insurance

Paying off your mortgage if you die sounds like a great option for your loved ones, but what if the same policy could pay off your mortgage 7 to 8 years early if you live a long healthy life?

Mortgage protection insurance can help you pay off your mortgage early if you buy the right plan. Let’s take a look at one type of life insurance that can pay your mortgage off early if you live.

Type of plan – How it works

There are several types of policies you can use for these strategies, a term with a return of premium can work, but an index universal life policy is your best option. An Index Universal Life policy will provide a death benefit and build cash value. The cash value will grow by tracking an index such as the S&P 500. IUL policies get all the upside and possibility of double-digit market returns (up to a cap) with none of the downside of negative market years.

Adding a disability insurance rider makes sense

The best life policies can be modified and improved upon. An additional benefit that you add on to a life policy is called a rider. One rider you should consider, if you buy mortgage protection insurance is the disability rider. If you become disabled, the life policy will pay a monthly benefit which can total the amount of your mortgage payment or more depending on the amount of the rider.

Most disability riders come with short-term and long-term options based on your disability. If you become disabled, the policy provides cash which can help make mortgage payments.

The cost of the rider can vary by the mortgage protection insurance company you pick. Make sure you are looking at multiple companies and their options before you make a decision. Also, qualifying for a disability rider is tough; you must be in good health to do so.

By Brad Cummins