Best Mortgage Protection
What are the absolute best mortgage protection insurance companies? Before we cover that let’s define what mortgage protection is: mortgage protection is an optional life insurance policy used to pay off the mortgage in case of your death.
Mortgage protection is structured as a term insurance policy, which means they remain in effect for specified amount of time, typically 10 to 30 years. If you die before the term expires the insurance company will pay off your mortgage. If you don’t, they keep the money you paid in premiums.
However, these policies are drastically decreasing the foreclosure rates across the country. It’s a very, very important kind of policy. It’s something that you want to into if you do not presently have it in place.
Talk it over with your spouse, another family member, or even a friend. Have the conversation with them about it. Is this something that you should be doing? Is this something that would be helpful? Is mortgage protection insurance more important now more than ever because of the coronavirus pandemic anyhow quickly one can die from it?
If you think you should consider having mortgage protection in place then understand there are a lot of different ways that you can structure mortgage protection policies when looking for the best mortgage protection.
Full Return of Premium Mortgage Protection
One way that’s worth mentioning is through a full return of premium mortgage protection policy.
You don’t see this type of policy that often. It does cost more, in terms of your premium to get it but every penny of your investment that you put into the policy, over a 30 year policy term, 100% of that investment comes back to you at the end of that period of time.
A return of premium mortgage protection policy is great if you can afford it. You know that that’s coming back to your family at the end, but you have to stick to it for the full course of that term. N
Private mortgage insurance (PMI) is a mortgage insurance that the lender takes out to protect their investment. You pay for it and the lender benefits if you default.
People with mortgages think it benefits them but it does not. They are making monthly payments on it thinking they are protected but they are mistaken. Only the lender is.
It’s a very, very common misunderstanding. PMI, private mortgage insurance is not the same thing as mortgage protection. PMI does not benefit you. It’s required in order to get your loan in order to get approved because it protects the lender.
If something happens to you, they get paid for the entire mortgage amount. It just that it covers the risk of the mortgage not being paid if something happen to you. There’s an actual calculatable risk to the lender anytime that a borrower passes away.
It’s the way to, to cover that added risk and they have a policy for it. This type of insurance should reconsidered when looking for the best mortgage protection for your family.
Best Mortgage Protection With Life Insurance
Mortgage protection with life insurance is the opposite of that. It still benefits the lender in the sense that they get their money back because it pays off that loan but it is built to benefit you, the insured, and your beneficiaries.
If you pass away the mortgage is totally paid off and your beneficiary owns the house free and clear with no mortgage anymore. Without that type of mortgage protection in place, whoever you leave behind would be burdened with paying of that mortgage or they will lose the house. it could be you spouse, your children, a relative or friend would not have the income or wherewithal to afford the mortgage payments.
Mortgage protection life insurance solves that problem. If you can budget in the cost on a monthly basis, quarterly basis, annual basis then you can afford the mortgage protection insurance. It’s a little bit more strain for now and for the course of that policy but if something happens to you, you have the peace of mind knowing your family and mortgage will be covered after you die.
Important Things to Consider
When you’re selecting your mortgage protection, here is short list of the things that are very important.
You want to make sure that the insurance carrier or the provider is A-rated. It’s a very, very important thing and it’s not about reviews. It’s about an independent and professional rating. All of the companies Protect With Insurance that we work with are A-rated.
The reason we only work with A-Rated life insurance companies is because these companies have proven track records, are dependable, are financially solvent and will pay out what is promised 100 percent of the time.
We do not work with B-Rated companies because we can’t sure they will deliver the goods when the time comes or even if they will be around in another decade or two.
Another consideration is make sure the policy is full coverage, meaning it covers any kind of death, that is not suicide. You want to make sure any kind of death is covered, including accidental, and that the policy is going to take care of that mortgage.
There are mortgage protection policies out there that are purely accidental. You have to be careful about that.
You want to make sure that the length of the policy is sufficient. If it’s 10 years, you want to make sure that 10 years is truly going to be enough.
If you have a shorter term policy
You may find yourself wishing as you approach the end of the term that you had a longer policy. You have to think ahead on that and make sure that it’s long enough. the longer the policy, the more it will cost month to month but make sure you get it priced both ways so you can really look at that.
Also, make sure it’s sufficient coverage that will cover the full amount of your mortgage. That’s a given because 99% of the time that mortgage protection policy is going to be set up for the amount of the mortgage. As long as you do that, then you should be in good shape.
You want to make sure that that your mortgage is fully covered and all is squared away. You want to make sure that you get the best price but that’s easier said than done.
Getting the Best Mortgage Insurance Price
There are two ways to accomplish getting the best price. One is you can call 30 different providers and you can feel them out, or you can pick a life insurance brokerage agency to find the best deal out there.
it doesn’t have to be ours. You can pick another agency but pick an agency that is high rated and has excellent reviews, strong testimonials, solid looking website.
Make sure they’ve been around in business for a long time. You want to have an agency that’s an independent agency, not a captive agency, meaning they only work with one insurance company and only have access to their products.
You’re really losing out if you go with agencies that are captive agencies.
You want to make sure that you have living benefits protection built in your mortgage protection policy. Living benefits provides a path for the policy to pay out entirely while you’re alive.
It doesn’t have to cost very much. Yet, it can protect you if you are diagnosed with a critical health condition, chronic health condition or a terminal health condition.
In most cases if you have a $300,000 mortgage, your beneficiaries are paid upon your death for the mortgage. They send you the $300,000 pay off the mortgage, right? A terminal diagnosis means you don’t wait until death to get paid. You get the agreed policy amount right then and there. So now you’re living out your time with no more mortgage and you know that that’s already squared away.
The last thing to consider is you want to make sure that it’s going to be tax free money. All the mortgage protection policies that we work with are not taxed. This is a very important thing.
Otherwise, that’s going to be some pretty serious impact that your loved ones if you don’t make sure your mortgage insurance pay out is not taxed. It will become a problem for your heirs having to pay taxes on top of everything else.
Now another common question we get is if mortgage protection is the same thing as a term life insurance policy. Yes, it absolutely is. It’s the same thing as a term life insurance policy.
The only thing that’s going to be unique about mortgage protection insurance is that it’s is built from the ground up to take care of the needs related to that mortgage, rather getting a random, semi-random or otherwise calculated term life insurance amount.
It’s going to be something that is built to take care of that mortgage. You can get it in addition to your life insurance. A lot of our clients do. Most of our clients said they have a life insurance policy and have had it for 10 years and now they have a mortgage. And so what their frame of mind is, well, if my, if I pass away here in the next 20 years, Then that life insurance is now going to have to go towards mortgage.
It’s going to have to go towards all these other things and that’s going to be really hard for their spouse. It’s going to be really hard for their siblings, they daughter and my son. So they get a mortgage protection policy as well and they know that that mortgage is going to be paid off. Their heir will own the house free and clear.
Also, that there’s also going to be this life insurance benefit. Bear that in mind that that is a very, very common way to go now.
What Are The Best Insurance Companies
What are the best life insurance companies in Arizona?
There’s no a simple, clear answer. The reason why is that there’s no such thing as one single company you will always want to work with.
That’s why we work with so many of them. We work with a plethora of A-rated life companies. They give us the best prices in the country. They have the best programs in the country. We work with them 100% of the time.
Our potential clients share their information with us …age health, whether they are a smoker or nonsmoker, their weight and build, things like that.
And then we shop for them on this whole network of A- rated companies unil we find the best policy and price for them.
We do that more than nine out of 10 times. We get the lowest price possible with a company that has the best living benefits. In some cases we’re able to just blow people’s minds by getting a full-return of premium option built in.
That’s the benefit of shopping all of these companies. We have lots of them that we work with like American Amicable, Mutual of Omaha, Transamerica, Foresters, Financial and Gerber. There are lots of these companies and a lot more that we work with on a regular basis and they give excellent prices. Reach out to us. We’ll see what we can do for you. We’ll pull a quote. Our average time on the phone with our clients is about six minutes and we’re happy to take as long as you need as far as answering your questions, whatever it is we can do for you. We hope this has been helpful.
Stay safe out there.