Hello, this is Chad McMahan with Protect With Insurance, this is another episode as part of the video blog series.
This one is on how much mortgage protection coverage can I get? The first thing that’s important that you understand is that all mortgage protection. Is structured term life insurance, and it’s important to understand that because you’re not locked into just getting the mortgage amount, you can get much, much more than the mortgage amount? The reason why it’s called mortgage protection is very simple is because it’s term life insurance that’s built around the amount of mortgage. But aside from that, it works identically because it is the same as other term life insurance.
So, yes, you can get much more than your mortgage amount and the maximum amount you can get depends upon your health depending upon your age. And you can get millions of dollars of coverage. But of course, you’ve got to pay for it. And so it gets a lot more expensive as you’re looking for larger amounts. Typical mortgage amounts are going to be anywhere from one hundred and fifty thousand to about six, seven, eight hundred thousand. Sweet spot.
Being about three to five hundred thousand dollars is if we’re seeing those amounts often on the mortgage amounts, but you can go much much greater amounts. It’s just that the cost will increase. Now it is very commonly more cost-effective to you and your family if instead of getting multiple policies if you umbrella one policy that’s going to cover your mortgage or other life insurance means living expenses, income replacement, all of these things. The beautiful thing about these policies is they pay tax-free and most of the time at least what we write for our clients, their level, meaning the coverage amount on these policies, will not decrease over the years.
So if you set yourself up with, let’s say, a 30-year mortgage protection policy and again, you know, mortgage protection, just term life insurance, but you set yourself up with this policy for a million dollars and something happens in a day after approval or twenty-nine years, whatever it is, then pay off that mortgage.
Anything leftover, you can treat that as just your term. Life insurance goes in the bank account and tax-free can be used completely flexibly for anything else that’s needed. They just send one lump sum check. It does not go to the lender. So you or your beneficiary.
So I hope this has been helpful. Any other mortgage protection questions? Please just reach out. We’re happy to help you and stay safe out there.