If you have a mortgage, you might recall receiving a lot of mail after closing regarding your mortgage. It comes in official-looking envelopes and is meant to look like it’s from the bank. But it’s not, it’s from an organization looking to sell you life insurance.
Modern “Mortgage Protection” Insurance is a life insurance policy. Agents who specialize in this type of insurance plan to come to your house, spend about 45 minutes with you, and leave with a check for one or two policies (in the case of a spouse.)
What’s wrong with this? My primary beef with “Mortgage Protection” is the cost. Insurance companies issue the policies quickly, without medical underwriting. This means the agent gets paid very quickly. As a result, you are usually paying twice as much as you would for a normal policy.
It is important to have life insurance that can pay off your mortgage if you pass away prematurely. However, the best way to cover that need is through a normal policy, not one designed to make the insurance agent a quick buck and leave you with a premium that’s twice as expensive.
Did you purchase a “Mortgage Protection” policy? Get in touch so we can compare rates. You are probably paying much more than you need to be.