The short answer
You may not need separate mortgage protection if your current life insurance is large enough to cover the mortgage plus your family's other needs, and lasts until the loan is paid off. Group coverage through work often falls short or ends when you change jobs. If you find a gap, a separate term policy can fill it.
This guide answers the most common questions about where can i get mortgage protection insurance.
If you already have life insurance, you might not need a separate mortgage policy. Or you might find your current coverage falls short once the mortgage is counted.
This guide shows how to compare your needs with your coverage in a few minutes.
Quick answer
Mortgage protection is life insurance used for a specific job. Group life at work often ends when you change jobs. If there is a gap, a second policy is often simpler than replacing the first.
MarketView Agency is an independent insurance agency (National Producer Number 18345705).
On this page
- Where can i get mortgage protection insurance: is your current policy enough?
- How much coverage do you need?
- One policy or two?
- How long should the policy last?
- Can you turn term into permanent coverage?
- Should the coverage shrink with your loan?
- Who mortgage protection is for (and who it isn't)
- Frequently asked questions
Where can i get mortgage protection insurance: is your current policy enough?
Maybe not. Mortgage protection is a use for life insurance, not a separate product. If your current coverage is large enough to pay off the home and cover your family's other needs, you may already be protected.
- Add up the needs: mortgage balance, other debts, years of income and future costs like school.
- Add up the coverage: individual policies plus any group life at work.
- Check the end dates: group coverage often ends when you leave a job, and term policies end on a set date.
If the needs are larger than the coverage, or the coverage ends before the mortgage does, that gap is what mortgage protection fills.
We cover this in detail in How Does Mortgage Protection Insurance Work?. We cover this in detail in Mortgage Protection Insurance Cost: What Sets Your Price.
How much coverage do you need?
There is no single right number. Start with the job you want the policy to do. If the goal is to pay off the mortgage, the loan balance is the floor. If you also want to replace income for a few years, add that on top.
Then subtract what you already have. Savings, investments and life insurance through work all count, though group coverage often ends if you change jobs. Many families end up with one policy for the mortgage and another for income, each with its own term.
Compare rates from several carriers in about two minutes. Free, no obligation.
One policy or two?
You do not have to cover every need with one policy. Many families use two: a longer term for income while children are young, and a term matched to the mortgage. As each need ends, so does its policy and its premium.
Layering can cost less over time than one large, long policy. It also makes it easier to fill a gap without replacing coverage you already have.
How long should the policy last?
Think about two dates: when your mortgage will be paid off, and when your family would no longer depend on your income. The policy should usually last until the later of the two.
Many homeowners pick a 20- or 30-year term at closing. If you bought years ago, a shorter term may match what is left. Some people stack two policies, a longer one for income and a shorter one for the loan, so coverage drops as needs drop.
Can you turn term into permanent coverage?
Many term policies include a conversion option. It lets you change some or all of your term coverage into a permanent policy without new medical underwriting, as long as you do it within the window the policy allows.
That matters if your health changes. Even if you could not qualify for new coverage, conversion can keep you insured. The new permanent policy usually costs more because it lasts for life, and the price is based on your age when you convert.
Check three things in any term policy: whether it is convertible, until what age or policy year, and which permanent products you can convert into.
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.
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.
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.