The short answer
Mortgage protection letters in the mail are usually advertisements from insurance marketers who use public mortgage records, not notices from your lender. Many are real offers, but you are never required to respond. Check the sender's name and license, and compare any offer with quotes from several carriers before you share personal details.
Mortgage protection letters in the mail start arriving soon after closing. Some look like they came from your bank. Most are simply advertisements from insurance marketers who read public mortgage records.
This guide explains where the letters come from, how to check the sender, and how to see if the offer inside is any good.
Part of our complete guide: Mortgage Protection Insurance: The Complete Guide.
Quick answer
The letters come from public mortgage records, not your lender. You don't have to respond to any of them. Use them as a reminder, then compare quotes from several carriers.
MarketView Agency is an independent insurance agency (National Producer Number 18345705).
On this page
- Why you get mortgage protection letters in the mail
- What is mortgage protection insurance?
- Mortgage protection offers after closing: why a lender's policy is different
- How long should the policy last?
- Why compare with an independent agent
- How insurers decide your rate
- Who mortgage protection is for (and who it isn't)
- Frequently asked questions
Why you get mortgage protection letters in the mail
If you bought or refinanced recently, you have probably received envelopes about mortgage protection. They come from companies that read public mortgage records, not from your bank.
The coverage they offer can be real, but the letter itself is an advertisement. You are not obligated to reply, and you are free to compare. A quick, independent quote is the easiest way to see if the offer is a good one.
We cover this in detail in Mortgage Protection Insurance Cost: What Sets Your Price.
What is mortgage protection insurance?
Mortgage protection is a way of using life insurance to keep your home in the family. You pick a coverage amount close to your loan balance and a term that matches the years left on your mortgage.
- If you pass away while the policy is in force, your beneficiaries receive the benefit.
- They can pay off the loan, keep paying it, or use the money for other needs.
- The benefit is generally income-tax-free to them.
- Many policies include living benefits for serious illness.
Because it is usually term life insurance, the premium stays level for the term on most policies, even as your loan balance goes down.
Compare rates from several carriers in about two minutes. Free, no obligation.
Mortgage protection offers after closing: why a lender's policy is different
Some lenders and banks offer mortgage life insurance at closing or by mail. It can be convenient, but read the details.
| Feature | Lender mortgage life | Individual term policy |
|---|---|---|
| Beneficiary | Often the lender | Your family |
| Benefit over time | Often shrinks with the loan | Usually level |
| If you refinance or move | Often ends | Stays with you |
| Underwriting | Often limited questions | Full or simplified, varies |
| Shopping | One option | Compare several carriers |
An individual term policy you own is usually more flexible. You choose the beneficiary, the benefit does not drop with the loan, and the coverage follows you if you sell or refinance.
How long should the policy last?
The simplest rule: pick a term that lasts at least as long as the years left on your mortgage. Common choices are 15, 20, 25 and 30 years.
- New 30-year loan: a 30-year term usually fits.
- Loan with 18 years left: a 20-year term covers it with a little room.
- Planning to pay it off early: a shorter term can save money, but it is a bet on the payoff date.
If you have children at home, you may also want the coverage to last until they are on their own. That can point to a longer term even if the loan is shorter.
Why compare with an independent agent
A captive agent works for one insurance company and can only offer its policies. An independent agent is appointed with several carriers and can compare them side by side.
That matters because carriers price the same person differently. One may be friendlier to a past health condition, another to tobacco users, another to larger coverage amounts. Comparing several gives you a better chance at a fair price.
You do not pay extra to use an independent agent. Agents are paid by the carrier you choose, and the premium is the same as buying from that carrier directly.
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.
How insurers decide your rate
Underwriting is how an insurance company decides whether to offer a policy and at what price. It sounds technical, but the idea is simple. The insurer wants a clear picture of your health, your habits and how much coverage you are asking for.
The application
You answer questions about your age, height and weight, tobacco use, medical history and prescriptions. Answer every question fully and honestly. A wrong answer can give the insurer grounds to contest a claim later, especially in the first two years of the policy.
Database checks
Most insurers check prescription history and a shared industry database of past applications. Many also look at your driving record. These checks are why some policies can skip a medical exam: the records answer many of the same questions.
Exam or no exam
Some policies ask for a short exam at home or work, usually a quick health check and a blood and urine sample. Others decide from your answers and records alone. A policy without an exam is faster, but it can cost more or cap how much coverage you can get.
Once the insurer finishes, it offers a rate class. Healthier applicants get better classes and lower rates. If the offer is higher than the quote, an independent agent can often take the same application to another carrier that views your history more kindly.
Who mortgage protection is for (and who it isn't)
Often a good fit
- a mortgage that depends on your income, kids at home, a partner who could not cover the payment alone.
- new homeowners who want to lock in today's age.
Maybe not the right fit
- your current coverage already pays off the home and covers living costs.
- the home is nearly paid off and savings could finish it.