The short answer
If you are wondering what mortgage protection insurance costs, the honest answer is: it depends on you. Age, health, the amount and the term do most of the work. The carrier you pick does the rest.
Below, we break down each factor and share practical ways to lower the premium without giving up the protection your family needs.
Part of our complete guide: Mortgage Protection Insurance: The Complete Guide.
Quick answer
Age, health and tobacco use drive most of the price. Matching the term and amount to your loan avoids paying for coverage you don't need. Carriers price the same person differently, so comparing several pays off.
MarketView Agency is an independent insurance agency (National Producer Number 18345705).
On this page
- Mortgage protection insurance cost: what sets your price
- Mortgage protection rates: how to keep mortgage protection affordable
- Should the coverage shrink with your loan?
- What happens after you apply: underwriting
- Optional riders and what they do
- Why work with an independent agency
- Who mortgage protection is for (and who it isn't)
- Frequently asked questions
Mortgage protection insurance cost: what sets your price
There is no single price for mortgage protection. Each carrier sets rates using the same basic factors, then weighs them in its own way.
- Age. Coverage costs less the younger you are when you buy.
- Health. Your history, medications and current conditions shape your rate class.
- Tobacco or nicotine use. Users pay noticeably more with most carriers.
- Coverage amount. A larger loan balance means a larger benefit and a higher premium.
- Term length. A 30-year term costs more per year than a 15-year term.
- Riders. Return of premium or disability riders add to the price.
- Carrier. Two insurers can quote the same person quite differently.
Because the factors are weighed differently, comparing several carriers is the most reliable way to find a fair rate for your situation.
We cover this in detail in How Does Mortgage Protection Insurance Work?.
Mortgage protection rates: how to keep mortgage protection affordable
A few choices make a real difference to the premium. Start with the term: it should cover the years left on your loan, not more. Next, look at the amount. Many people cover the current balance, since it shrinks over time.
Then look at riders. Living benefits are often included at no added cost. Others, like return of premium, can raise the price a lot. Finally, compare more than one carrier. The same health history can land in a better rate class with a different insurer.
Compare rates from several carriers in about two minutes. Free, no obligation.
Should the coverage shrink with your loan?
Mortgage protection comes in two main shapes. With level term, the benefit stays the same for the whole term. With decreasing term, the benefit drops over time, roughly in step with your loan balance.
| Feature | Level term | Decreasing term |
|---|---|---|
| Benefit over time | Stays the same | Goes down |
| Price over time | Usually level | Usually level |
| Left over after the loan is paid | Often money left for your family | Little or nothing |
| Best for | Mortgage plus other needs | Covering the loan balance only |
Many people pick level term. The price difference is often small, and your family keeps any money beyond the loan balance.
What happens after you apply: underwriting
Every life insurance application goes through underwriting. That is the insurer's review of who you are, how healthy you are and how much risk the policy carries. The result is your rate class, which sets your price.
- Your answers. Health history, medications, tobacco or nicotine use, family history, travel and hobbies.
- Records. Prescription history, a shared database of prior insurance applications, and often your driving record.
- Sometimes an exam. A short visit from a paramedical examiner to check height, weight, blood pressure and lab samples.
- Sometimes medical records. For larger amounts or certain conditions, the insurer may ask your doctor's office for notes.
Insurers do not all weigh these things the same way. One carrier may treat a managed condition, like controlled blood pressure, more favorably than another. That is a big reason to compare several carriers rather than accept the first offer.
Be complete and honest on the application. Policies have a contestability period, usually the first two years, when the insurer can review a claim against what you said when you applied.
Optional riders and what they do
A rider is an option you add to a policy. Some are built in at no extra cost, others add to the premium. Availability and terms vary by carrier and state, so check the details of any policy you consider.
- Accelerated death benefit. Lets you access part of the benefit early if you are diagnosed with a terminal illness, and on some policies a chronic or critical illness.
- Waiver of premium. Keeps the policy in force without payments if you become totally disabled, as defined in the policy.
- Return of premium. Refunds premiums you paid if you outlive the term and the policy stays in force. It costs more.
- Child rider. Adds a small amount of coverage for your children under your policy.
- Disability income or payment rider. Some policies can pay a monthly amount for a set period if you cannot work due to a covered disability.
Riders are useful, but each one adds cost or complexity. Pick the ones that fit a real worry, and skip the rest.
How to get covered in 3 steps
- Check your rate. Pick your state and answer a few quick questions about the coverage you want.
- Compare carriers. A licensed agent compares mortgage protection options from several insurers and explains the trade-offs.
- Apply and get covered. Many applications take one phone call. Coverage starts once the policy is issued and the first premium is paid.
Why work with an independent agency
We are an independent agency, which means we are not tied to one insurer. We compare plans from several carriers and help you pick the one that fits.
- More choices. Several carriers, not one.
- Help with health history. Some carriers view certain conditions more favorably than others.
- No added cost. Premiums are set by the carrier, not the agent.
- No pressure. If a policy is not a fit, we will say so.
Who mortgage protection is for (and who it isn't)
Often a good fit
- Homeowners whose family depends on their income to make the mortgage payment. Couples who need both incomes. Single parents. Anyone with little or no other life insurance. Self-employed owners without group coverage.
Maybe not the right fit
- People whose existing life insurance already covers the mortgage and other needs. Homeowners with a small balance and plenty of savings. Households where no one depends on the income that pays the mortgage.