What’s the difference between Mortgage Protection and Mortgage Insurance?

What’s the difference between mortgage protection and mortgage insurance. I’m Chad McMahan with protect with insurance. I’m going to do my best to answer this for you quickly and simply so that you get your answers. And as always reach out to us, you can call us. You can email us, but dropping us a quick email at hello@protectwithinsurance.com.

Let us know if you want to see other videos or blogs about anything particular. We’re happy to help. So first of all, mortgage protection, that’s the easier one to explain. It’s a term structured life insurance policy. That’s built from the ground up to take care of paying off your mortgage upon your death.

A lot of policies will also completely take care of that mortgage. If you’re diagnosed with a whole bunch of these different medical issues. So great examples would be anything that’s terminal. That’s less common. A lot of these policies will a hundred percent pay it off or 95% pay it off for a chronic diagnosis.

That’s a lot more common, also critical. That’s something we’re seeing more and more of,  as a country, we’re really an unhealthy country. A lot of health problems are continuing to surface and not make this a political video, but. We are having a lot of health problems as a country. So these things are becoming more common and it’s,  wonderful thing to have that built into your mortgage protection policy.



You get that diagnosis you’re still alive. You may even be around for another 30 years, 40 years, but as soon as you get that diagnosis, you get a letter from the doctor or email from the doctor or the clinic, send it on over to the insurance company and they do not send the money. To the lender. Again, it’s structured as term life insurance.

So they’re going to send that money to you. You’re alive. So it doesn’t go to your beneficiary. It goes to you, as long as you’re alive, it’s considered a living benefit and all living benefits come to you. The insured. Now, when you do pass away, that goes to your beneficiary. You’re not around to receive it.

so they’re going to receive it. They’re going to be well taken care of. So that is the short and sweet version of the mortgage protection. It is term structured. You don’t want to get that whole life structured. You want to get a term structured, you have to be healthier to get it,  reach out to us or check out other blogs to see what that means.

As far as what the health requirements may be. Now, mortgage insurance unfortunately has been that term has been pretty heavily brutalized,  online. So it’s very confusing for a lot of people. Mortgage insurance is confused with private mortgage insurance. It’s confused with mortgage protection. It’s confused with homeowners insurance.

So let me tell you what it really is. Most of the time, I’ve got to explain all three of these things for this to make sense. So bear with me, I’ll try and make it short and sweet mortgage insurance of those three different things. It can be. Let me go through, you already know mortgage protection. We just went over that one.

best way to refer to that, to keep it clean, keep it simple. It’s just call that mortgage protection. But if you mean a private mortgage insurance and the lenders have a lot to do with the confusion, because they’ll say, Oh yeah, we can take care of, you know, mortgage mortgage insurance is built in to your policy.

What they mean is PMI. Private mortgage insurance is something that a lot of the lenders will require you to pay for. In order to take a step forward and finance for you now, first of all, I’ve got to say that aside from them saying, yes, we’ll go ahead and put the stamp on here and we’ll go ahead. And,  finances for you.

There’s no other benefit of private mortgage insurance. It does not benefit you. It benefits the lender. It does not pay down the mortgage upon death. A lot of people think that it does, it does not. And it’s heartbreaking for a lot of people and very frustrating for a lot of people to find out. That this private mortgage insurance that they thought would pay it off and something happens.

it doesn’t do that at all. And so part of our job as an agency is to help educate the consumer because you deserve to know the truth on that. So private mortgage insurance, it’s a requirement from a lot of lenders. You pay the bill. It usually doesn’t cost very much. Typically it’s built into your payments and it’s something that if you do pass away, it does not pay down what is due.

It’s a,  it is a policy. It is a life insurance structured policy that pays to the lender, but it does not pay down the mortgage. What it does is it reduces their risk in writing this loan for you,  reduces their operating costs upon a death because typically there are delays of payments,  bad loans, things like that when someone dies.

So that’s how they’ve calculated.  the risk to a dollar amount, if someone dies and that’s what they build into your policy. So private mortgage insurance does not benefit,  you the borrower or the co-borrower upon death or anything like that. It’s just a requirement by a lot of lenders. Now, homeowners insurance has nothing to do with mortgage protection,  that as you probably know, homeowners insurance is you own a home.

Get an insurance policy. If something goes wrong with the home, then the insurance company,  They typically sent the money to fix it, or they make it right somehow in terms of that financial costs. So that has nothing to do with mortgage protection.  so I hope that that clears it up. Mortgage protection is typically something that if you are 18 to age 50, that’s the most common age range.

You can get it all the way up to age 85. However, it gets quite expensive. As you get past the age of about 65 or 70, particularly if you need to get an insured amount,  over 50 or a hundred thousand dollars, a lot of people have 200,300, $400,000 or more in their mortgage, and they want to insure that amount and it gets ridiculously ludicrously expensive.

if you get past the age of about 60, 65, And truthfully, even if you’re age 40, 45, it can be quite expensive for those large sure.  mortgage protection coverage amounts. And so, anyway, I hope that’s helpful. Please reach out to us. You can always get quotes off of our website, but the fastest way is you can text us.

You can call us, you can email us. We’ll be happy to get you a quote and texting. You can do that straight to our work. Number (928) 323-0933. Text us, or call us. We’ll be happy to help you.