Finding a Quality Mortgage Protection Insurance Company

Finding a quality Mortgage Protection Insurance Company for you and your family can be difficult. Learn about coverage options here!

Life can be so uncertain. We never really know what tomorrow might bring, or even what things might look like five minutes from now. And that can make planning for the future difficult.

The financial security of your loved ones comes as a top priority. Making sure they are well provided for, even after you’re gone, is undoubtedly one of the most important things to plan.

Fortunately, we have the option to provide a little assurance by purchasing insurance. It comes in all different varieties, and for anyone with a mortgage or considering one, perhaps mortgage protection insurance could provide some much needed stability.

What is Mortgage Protection Insurance?

Mortgage protection insurance is essentially coverage against an incident out of the policyholder’s hands that would prevent them from meeting their monthly mortgage payments. Policies function similarly to life or disability insurance policies.

What Does it Cover?

If a homeowner with mortgage protection insurance passes away, the policy picks up the cost of your monthly mortgage payment. Or will just pay off the remaining balance in one lump sum. The circumstances of what entitles the policyholder for coverage vary depending on the specific policy. But, death, job loss and disability are the usual circumstances for a policy payout. This is with death being the standard reason for collection.

In some cases an additional premium must be paid to obtain coverage from disability or job loss. When offered as a kind of life insurance, it is not uncommon for policies to only provide coverage in the event of death.

How Does it Work?

In the event that the policyholder passes away, the insurance company will cover whatever balance remains on the mortgage. This protects your family from financial hardship and insecurity in the worst case scenario.

Mortgage protection insurance is a tax free benefit. This means that the entirety of its coverage amount will go directly towards paying off the mortgage. The coverage amount coincides directly with the mortgage amount. 

Coupled with Life Insurance

Mortgage protection insurance works well in conjunction with a life insurance policy. Instead of using a life insurance policy to pay off your mortgage, its benefits can be used elsewhere. Like for potentially more pressing matters. 

Combining mortgage protection with life insurance through the same company may result in a lower monthly premium. This is for either or both monthly rates. Finding a company that offers the right rate or combinational discounts can have huge benefits for your loved ones.

Beneficiaries

The mortgage lender is considered the direct beneficiary of any mortgage protection insurance policy. As the payout is meant to cover the policyholder’s mortgage. It is especially popular when life insurance is inaccessible or unfavorable.

One reason why you may be unable to obtain life insurance is because you have been deemed high risk. Mortgage protection insurance often skips medical and lifestyle questions, which makes it easier to obtain.

Since house payments are a large expense, mortgage protection insurance can offer one of greatest benefits to your family. This is by covering that expense. While they might not directly receive any insurance payout, you can ensure they have a roof over their head.

Because the beneficiary is the lender instead of your family, payout options are far more limited when compared to traditional life insurance. Discuss with your financial advisor or insurance agent the specific payout and beneficiary options that are right for you. 

Mortgage Protection vs. Private Mortgage Insurance

Mortgage protection insurance should not be confused with private mortgage insurance (PMI), which is very much a different product. Whereas mortgage protection insurance is entirely optional, certain lenders require private mortgage insurance when specific criteria are met aren’t met.

Finding a Provider

Different companies offer different coverage options and rates. Finding the right insurance provider is key to getting the most benefits from your policy. Whether or not mortgage protection insurance is right for you should be discussed with a financial advisor. This is because they know the ins and outs of your own situation and needs.

Mortgage protection insurance is often offered directly by the lender or an insurance company associated with the lender. It could also be a separate insurance company. Mutual of Omaha offers a good comparison point when browsing for insurance. Here’s more info on the company.

Mutual Of Omaha

This company’s comprehensive Mortgage Protection plans mirror that of the most versatile mortgage insurance plans. 

They offer life insurance particularly geared for mortgage protection. They offer a wide range of coverage starting at $100,000 and exceeding $1 million. This means that you will most likely be able to find a policy that fits your needs.

Mutual of Omaha is an excellent option for those who are denied life insurance due to health status. They do not require any health examinations for those under 70 years of age. This means that you will not be denied coverage due to a preexisting medical condition.

Because this plan is fulfilled by the United of Omaha Life Insurance Company, any mortgage protection plan can be converted easily. It would be into a permanent life insurance plan should you choose to do so. They also offer a plan to cover your monthly insurance premium in the event of disability.

Mutual of Omaha offers competitive rates and will tailor fit a policy to best fit your specific needs and situation. Overall, they are a high benchmark for a mortgage insurance company. They are something of a standard when it comes to versatility. 

Mutual of Omaha, while not perfect, offers a comparative starting point.

When looking for a quality mortgage protection insurance company, it is best to consider how exactly mortgage protection insurance is beneficial to you and your family. It is often best to consider its restrictions in comparison to other types of insurance.

Moving

Unlike a life insurance policy which moves with you, mortgage protection insurance stays in one place. Also it is only valid for the property originally placed for. This means that if you move you will have to seek another policy. 

Beneficiaries

As stated before, the benefits of mortgage protection insurance only land directly to the lender. This is specifically to cover the mortgage. This factor offers a degree of convenience. The coverage amount ties to the mortgage amount of the policyholder.

Refinancing

That being said, whenever you refinance your home, updating your mortgage protection insurance is a necessity. This is to ensure proper coverage. Depending on your specific policy, this means that your monthly premium may change with your coverage amount.

Locking in a Rate

When considering mortgage protection insurance, be sure to find out whether or not you can lock in a premium rate regardless of any change in any mortgage amount due to refinancing. Most insurance providers give you a premium rate that only changes in the event of a refinancing.

When locking in a rate and coverage option, some beneficiaries may be able to pocket the remaining coverage amount. This is in the event that the mortgage amount went down. This is usually not an option when purchasing mortgage protection insurance directly from a lender.

Where to Obtain Mortgage Protection Insurance

Mortgage protection insurance is relatively obscure compared to life and homeowner’s insurance. Most policyholders obtain such directly from their mortgage lenders. Or through affiliate insurance organizations, but this does not automatically mean that your lender provides insurance.

Since it is essentially a type of life insurance, most life insurance companies offer some sort of mortgage protection plan. This often has a label of Mortgage Life Insurance.

Speak with your lender to understand the mortgage protection options that are available to you. It can also be a good idea to shop around and try to find the best rate.

However, it can be a hassle to get a variety of mortgage quotes in general. Searching through the waves of offers specifically for an insurance rate can be particularly taxing. That’s why NextGen is here to help you find the right insurance.

How We Can Help

We have access to all of the top life insurance providers, which means that we can get you the right coverage at the right price. For an easy quote comparison, go here and see where you can start saving money. 

If you’re in the market for mortgage protection insurance, contact us. We can better help you understand which coverage option is right for you. Digging around for the right insurance does not have to be straining. And you do not have to go it alone.

Call us today at 816-281-8750 to speak with our experienced consultants. Get the protection and assurance you and your family deserve.

Bear in mind that some of the links in this post are affiliate links and if you go through them to make a purchase I will earn a commission. Keep in mind that I like these companies and their products because of their quality and not because of the commission I receive from your purchases. The decision is yours, and whether or not you decide to buy something is completely up to you.