How do you extend the length of mortgage protection insurance? I’m going to quickly answer this important question for you. First, what IS mortgage protection insurance? It is a term structured life insurance policy that’s built around your mortgage that pays off your mortgage in full if you die or if diagnosed with any of a long list of medical conditions- even something as common as a stroke or a heart attack can pay off your mortgage.
As we get older, our health declines. And so this insurance secures your family so that if something happens, you’re covered. First of all, mortgage protection programs will allow you to go past whatever the contracted length of mortgage protection is. So if you have a 30-year mortgage protection policy, meaning the same price for 30 years and your health is locked in, that price is locked in for 30 years.
If you have a 30-year mortgage protection policy, some insurance programs offered by other companies will allow you to continue past the end of that 30 years at a higher price. So they don’t all allow for extension. Only some programs do. And some programs will specifically only let you extend another five years or another one year or it’s one year renewable after that point.
So you’ll have the same price for the whole duration of your mortgage protection policy. And then starting in the year following that locked-in price, the price will increase, especially with the longer (20+ years) mortgage protection policies. Typically it’s 5to 10 times what the cost was before.
And that’s just in that next year that cost will continue to go up,
Sometimes it’s a five-year renewable cost, meaning that some of these policies will continue to go up every year, but don’t go up every month. Some of them, it won’t go up until you hit five years. And then it goes up and then you go another five years and then it goes up and they tend to have a maximum age.
It depends again on the program and the company, but a lot of them have a maximum age of about ninety-five years. Once you hit ninety-five, they don’t continue to renew that and extend that. Most people do what they do because it’s more cost-effective, but you lose the large coverage that’s in the policy. But most people what they will do is they’ll let their 30 years go by and then at the end they let go of their policy and they get reinsured usually for less coverage at that point.
And you usually have whole life insurance at that point.
Now, if you got your mortgage protection when you were in your 20s or 30s, then you’re still young.
You’re probably not going to feel young and it’s all relative, but you’re still young and you can get reinsured terms. And it’s going to cost a lot more than what you’re used to paying, but it’s going to be reasonable for a lot of people within budget. However, if you originally got your mortgage protection when you were in your 40s or 50s or later, then it’s going to be very expensive to get reinsured the same way with large coverage. So I hope this has been helpful.
Please reach out to us to have any specific queries that we can help you with. We’re here for all your mortgage protection needs. We want to take care of you. All right. Stay safe out there.