[{"@context":"https:\/\/schema.org\/","@type":"BlogPosting","@id":"https:\/\/www.easyquotes4you.com\/mortgage-protection-insurance-for-homeowners\/#BlogPosting","mainEntityOfPage":"https:\/\/www.easyquotes4you.com\/mortgage-protection-insurance-for-homeowners\/","headline":"Mortgage Protection Insurance for Homeowners","name":"Mortgage Protection Insurance for Homeowners","description":"Quick Navigation Links Show 1 Mortgage Protection Insurance\u2026The Good 2 Mortgage Protection Insurance\u2026The Bad 3 Options Other Than Mortgage Life Insurance 4 Term Life Insurance 5 Permanent Life Insurance 6 Final Thoughts 7 Frequently Asked Questions 8 What is mortgage protection insurance? 9 Does mortgage protection insurance decrease? 10 What is the disability income rider?.. <a class=\"moretag\" href=\"https:\/\/www.easyquotes4you.com\/mortgage-protection-insurance-for-homeowners\/\">More<\/a>","datePublished":"2018-11-29","dateModified":"2021-02-02","author":{"@type":"Person","@id":"https:\/\/www.easyquotes4you.com\/author\/site-admin\/#Person","name":"Rob Pinner","url":"https:\/\/www.easyquotes4you.com\/author\/site-admin\/","identifier":1,"image":{"@type":"ImageObject","@id":"https:\/\/secure.gravatar.com\/avatar\/e4da538e10e071b419f4843e8193941a0ff5ad58e937daa177fa846a5124dc4d?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/e4da538e10e071b419f4843e8193941a0ff5ad58e937daa177fa846a5124dc4d?s=96&d=mm&r=g","height":96,"width":96}},"publisher":{"@type":"Organization","name":"Rob Pinner","logo":{"@type":"ImageObject","@id":"https:\/\/www.easyquotes4you.com\/wp-content\/uploads\/2018\/09\/logo-shape-e1536791917640.png","url":"https:\/\/www.easyquotes4you.com\/wp-content\/uploads\/2018\/09\/logo-shape-e1536791917640.png","width":600,"height":60}},"image":{"@type":"ImageObject","@id":"https:\/\/www.easyquotes4you.com\/wp-content\/uploads\/2018\/11\/mortgage-protection-insurance-1.jpg","url":"https:\/\/www.easyquotes4you.com\/wp-content\/uploads\/2018\/11\/mortgage-protection-insurance-1.jpg","height":881,"width":1200},"url":"https:\/\/www.easyquotes4you.com\/mortgage-protection-insurance-for-homeowners\/","about":["Mortgage Protection Insurance"],"wordCount":1384,"keywords":["guide to mortgage protection","mortgage life","Mortgage proteciton insurance","permanent life","pros and cons of mortgage protection insurance","term life insurance","why i need mortgage protection life"],"articleBody":"            Quick Navigation Links                                    Show                                                    1                Mortgage Protection Insurance\u2026The Good                                2                Mortgage Protection Insurance\u2026The Bad                                3                Options Other Than Mortgage Life Insurance                                4                Term Life Insurance                                5                Permanent Life Insurance                                6                Final Thoughts                                7                Frequently Asked Questions                                8                What is mortgage protection insurance?                                9                Does mortgage protection insurance decrease?                                10                What is the disability income rider?                                11                Should I own mortgage protection insurance?        When you purchase a home, this usually will be one of the biggest financial obligations of your life. Mortgage Protection Insurance will become essential in your financial planning, especially when buying a home with a spouse or loved one.In 2015, homeowners median monthly mortgage payment was $1,030 according the U.S. Census Bureau. Mortgage payments amounted to about 14% of pre-tax income among homeowners.Most families today are a two income household, so it\u2019s easy to understand how a death or disability could put a strain on making the mortgage payment. The last thing anyone wants is for their family to have to move or worse become homeless, especially when a little planning can ensure this doesn\u2019t happen.Life insurance can take the \u201cwhat ifs\u201d out of life and here\u2019s how.Mortgage Protection Insurance\u2026The GoodMortgage protection insurance is a decreasing term policy that is sold through the bank and is usually offered around the time of closing.Mortgage protection insurance puts a spotlight on probably the biggest financial obligation of your life and designates money specifically to pay off the remaining mortgage balance. This can be crucial for loved ones, especially if the loved one is not used to handling the household finances everyday.Mortgage protection insurance is often used when the homeowner or homeowners have health problems and wouldn\u2019t qualify for a tradition life insurance policy. If you have significant health problems this would be the route to explore.These types of policies are also effective if your job occupation is considered high risk and traditional products are not an option.Mortgage protection insurance takes the guesswork out of life insurance planning. The death benefit is always equal to the balance on your mortgage so there is no questions about your loved ones future housing.Mortgage Protection Insurance\u2026The BadA major drawback to mortgage protection insurance is the decreasing benefit while the premium remains the same.For example, lets say you are 20 years into your 30 year mortgage which started out at $250,000. Your initial premium of your mortgage protection insurance ($50\/month) was based on the $250,000. Now you owe $100,000 on your mortgage, which means the benefit on your mortgage protection insurance is $100,000 with the same $50\/month premium. Not a great deal.Another major issue we have with bank sold mortgage protection insurance is that the lien holder (usually the bank) are the beneficiary of the policy, hence the money is used to pay off remaining mortgage balance. Any funeral expenses or other debts are the responsibility of your heirs.Also if you are somewhat healthy, mortgage protection insurance is not going to be the most cost-effective. You could save a substantial amount of money buying a typical term life policy over a 20 or 30 year period.Options Other Than Mortgage Life InsuranceTerm Life InsuranceProbably the best and less expensive option to protecting your mortgage is a traditional term life insurance policy.Traditional term life policies come with a level premium, but the death benefit remains level for the benefit period that is chosen. You can choose between 10-30 year benefit periods to align with the length of your mortgage.Term life policies also allow you to choose a beneficiary or beneficiaries.\u00a0 This can be your family or loved ones, even to charity. The beneficiary would receive a tax-free death benefit, which allows them to be in control of how the money is spent. This might mean paying off the mortgage along with other debt and funeral expenses.Traditional term life policies also provide (usually at an extra cost) riders that also meet pressing needs when you purchase a new home.\u00a0 These are:Disability Income RiderLiving Benefits RiderAccelerated Death Benefit RiderWaiver of Premium RiderReturn of Premium RiderLet look a little bit more into what these riders actually offer:Disability Income Rider:\u00a0This benefit provides a monthly payment to the insured, usually up to $2,000 in the event the insured were to become disabled and could not work.The riders usually have a 90 day elimination period (which means no benefit the first 90 days) and a 2 year benefit period (which means they will pay you for 2 years after the 90 day elimination period).This could be crucial if you have no disability insurance in place since it takes an average of 2 years to qualify for social security disability income through the government.Living Benefits Rider:\u00a0This rider is a fairly new concept that is catching fire with the life insurance carriers. How this feature works is if you were to be diagnosed with a major health issue, such as heart attack, stroke, cancer, etc., you are able to access up to 24% of your death benefit annually. You can use the money for anything, like paying bills, medical care, or even taking a vacation.Accelerated Benefit Rider:\u00a0The accelerated benefit rider allows the insured, if diagnosed as terminally ill, can access up to 80% of death benefit to pay for any needs.\u00a0 Terminally ill is defined as having a doctor diagnose you with have 12 months or less to live.Waiver of Premium:\u00a0This feature comes into play if you become disabled and cannot afford the premium payment. If you have this rider and become disabled, the insurance carrier will pay for the policy until you are no longer disabled. The insurance carrier even continues to pay after the benefit period of a term policy has expired as long as you are disabled.Return of Premium Rider:\u00a0There is nothing better than getting to the end of the benefit period of a term life policy and still being alive, until you realize that you have paid into a policy for 20-30 years to get nothing in return except for the peace of mind. Well the good news is that some insurance carriers offer a return of premium option which allows you to receive all premiums paid back at the end of the term period chosen.\u00a0Permanent Life InsurancePermanent life insurance is not used as often as term life insurance in terms of mortgage protection insurance. The main reason for this is the cost of permanent life insurance is more expensive compared to the cost term life insurance.Although there are some options you have with permanent life insurance policies that fit some clients.Permanent life policies last forever so you are able to maintain the death benefit even after you have paid your mortgage off.The premium is locked in at whatever age your purchased the policy.Permanent life policies build up cash value that can be used to pay your mortgage off early.Final ThoughtsIf you own a house it is very important to have some type of life insurance in place in the event of tragedy. Whether it is a bank sold mortgage protection life insurance policy or a traditional term, it is important to have something in place.Always consult with a experienced insurance agent to help explain each policy in detail to ensure you make a smart financial decision. If you have any questions please leave a comment of give us a call.\u00a0Frequently Asked Questions\t\t\t\t\t\t\t\t\tWhat is mortgage protection insurance?\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\tMortgage protection insurance is a decreasing term policy that is sold through the bank and is usually offered around the time you close on your house.\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\tDoes mortgage protection insurance decrease?\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\tYes, if you bought mortgage protection insurance through a bank it is a decreasing term life policy with the bank as the beneficiary.If you bought you mortgage protection insurance from an agent, then it does not decrease and you name your beneficiaries.\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\tWhat is the disability income rider?\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\tThe disability income rider is an add-on to term life insurance. It usually has a benefit of $2,000\/month, 90 day elimination period, and 2 year benefit period. This rider is activated 90 days after being declared disabled by a physician. \t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\tShould I own mortgage protection insurance?\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\tFor most people, it is essential to have some type of life insurance in place to cover your mortgage.\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t{\t\t\"@context\": \"https:\/\/schema.org\",\t\t\"@type\": \"FAQPage\",\t\t\"mainEntity\": [\t\t\t\t\t{\t\t\t\t\"@type\": \"Question\",\t\t\t\t\"name\": \"What is mortgage protection insurance?\",\t\t\t\t\"acceptedAnswer\": {\t\t\t\t\t\"@type\": \"Answer\",\t\t\t\t\t\"text\": \"Mortgage protection insurance is a decreasing term policy that is sold through the bank and is usually offered around the time you close on your house.\"\t\t\t\t\t\t\t\t\t}\t\t\t}\t\t\t,\t\t\t\t{\t\t\t\t\"@type\": \"Question\",\t\t\t\t\"name\": \"Does mortgage protection insurance decrease?\",\t\t\t\t\"acceptedAnswer\": {\t\t\t\t\t\"@type\": \"Answer\",\t\t\t\t\t\"text\": \"Yes, if you bought mortgage protection insurance through a bank it is a decreasing term life policy with the bank as the beneficiary.If you bought you mortgage protection insurance from an agent, then it does not decrease and you name your beneficiaries.\"\t\t\t\t\t\t\t\t\t}\t\t\t}\t\t\t,\t\t\t\t{\t\t\t\t\"@type\": \"Question\",\t\t\t\t\"name\": \"What is the disability income rider?\",\t\t\t\t\"acceptedAnswer\": {\t\t\t\t\t\"@type\": \"Answer\",\t\t\t\t\t\"text\": \"The disability income rider is an add-on to term life insurance. It usually has a benefit of $2,000\/month, 90 day elimination period, and 2 year benefit period. This rider is activated 90 days after being declared disabled by a physician.\"\t\t\t\t\t\t\t\t\t}\t\t\t}\t\t\t,\t\t\t\t{\t\t\t\t\"@type\": \"Question\",\t\t\t\t\"name\": \"Should I own mortgage protection insurance?\",\t\t\t\t\"acceptedAnswer\": {\t\t\t\t\t\"@type\": \"Answer\",\t\t\t\t\t\"text\": \"For most people, it is essential to have some type of life insurance in place to cover your mortgage.\"\t\t\t\t\t\t\t\t\t}\t\t\t}\t\t\t\t\t\t]\t}"},{"@context":"https:\/\/schema.org\/","@type":"BreadcrumbList","itemListElement":[{"@type":"ListItem","position":1,"name":"Mortgage Protection Insurance for Homeowners","item":"https:\/\/www.easyquotes4you.com\/mortgage-protection-insurance-for-homeowners\/#breadcrumbitem"}]}]