Mortgage Life Insurance - Compare & Get a Quote Today

Clifford PendellWritten by Clifford Pendell
mortgage life insurance banner If you are in the process or purchasing a home, or if you already own a home, you might be considering a mortgage life insurance policy to insure the balance of your loan.

While mortgage life insurance is usually reserved for those that are in the process of purchasing a home, term life insurance which can be purchased at any time to protect your mortgage.

In this guide we will explain the difference between mortgage life insurance and mortgage term life insurance to help you decide which type of coverage is the best for your needs. We’ve also laid out the benefits of both policies and provided some sample rates to help you compare costs.

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What Is Mortgage Life Insurance?

Mortgage life insurance, also commonly referred to as mortgage protection insurance, is a life insurance policy that pays off the balance of your mortgage if you die. Mortgage life insurance is usually offered by your lender or financial institution when you purchase a home.

Unlike other types of life insurance, the death benefit from a mortgage life insurance policy is paid directly to your lender instead of an individual. Your policy’s death benefit will also mirror the balance of your mortgage, meaning your coverage will decrease each month to reflect what you owe on your home.

During this time, your payments will remain level, and your policy will automatically cancel when your home is paid off. While mortgage life insurance will prevent your surviving family from losing the house, there are better life insurance options available for those in average or greater health.

A term life insurance policy can provide more coverage and flexibility at a lower cost. These policies can also be purchased at any time, not just when you buy your home. In fact, most of the mortgage life insurance policies you see advertised are term life insurance, not true mortgage life insurance.

Benefits of Mortgage Life Insurance

In addition to paying off your mortgage, a mortgage life insurance policy does not require a physical exam for approval. In fact, you do not have to be in insurable health to purchase mortgage life insurance, anyone buying a home can qualify. However, not every lender offers mortgage life insurance.

Another benefit of mortgage life insurance is that it pays directly to your mortgage lender. While this is not ideal for most situations, if you are worried about your beneficiary frivolously spending the money you leave behind, it could be a much safer choice.

Because mortgage life insurance does not require a medical screening or evaluation for approval, they can be issued almost immediately. Term life insurance on the other hand requires underwriting and it can take anywhere from day to a couple months for approval.

Mortgage Insurance Vs Life Insurance

While mortgage insurance offers some great benefits, for most people, a traditional life insurance is a much better option. A traditional life insurance policy, like term insurance, provides more flexibility because it pays your policy’s death benefit directly to your named beneficiary, not your mortgage lender.

Term life insurance also offers level premiums like mortgage insurance, but your coverage will not decrease as you pay down your mortgage balance. Instead, your policy’s death benefit will remain level allowing you to assign the remaining coverage to whomever depends on you for financial support.

This allows your loved ones to use the money you leave behind for their most immediate expenses while also settling the mortgage. In addition to providing more flexibility, life insurance also costs considerably less than mortgage life insurance, and you don’t have to purchase it when you buy your home.

Mortgage life insurance providers do not consider an applicant’s medical history, so healthy non-smokers will absorb the risk and cost of individuals with serious health issues. This makes mortgage insurance considerably more expense than term life insurance, especially for those in good health.

Term life insurance is offered in 5-year increments, for up to 40 years, allowing you to match your policy’s length or term to the years left on your mortgage. If you pay off your home early, you can cancel your policy without penalty or assign the coverage to your family, estate, business, trust, or a charity.

Most term life insurance providers also allow for periodic policy adjustments, so you will have the option to reduce your policy’s death benefit, and your monthly premiums will decrease. This provides some flexibility if your life insurance becomes unaffordable or your needs change.

Mortgage Life Insurance Cost

Mortgage life insurance tends to be more expensive than other forms of life insurance, especially for those in average or better health. If you are a non-smoker without any major health issues such as a history of strokes or heart attacks, term life insurance can provide ample coverage for a lot less money.

In the tables below, we’ve compared the cost of a 30-year term life insurance policy to a mortgage life insurance policy offered by a local credit union. These rates are for a non-smoker in good health.

Mortgage Life Insurance Quotes vs Term Life for Males – $500,000 of Coverage

Current AgeMortgage Life Insurance Monthly CostTerm Life Insurance Monthly Cost
35$129$34.07
40$159$48.94
45$221$76.19
50$379$124.04
55$662$229.15
60$1,268$505.00
65$1,904$773.00

*Displayed monthly rates are provided for illustrative purposes only and are accurate as of 12/30/2023. Guaranteed universal life insurance rates are displayed applicants over 60.

Mortgage Life Insurance Quotes vs Term Life for Females – $500,000 of Coverage

Current AgeMortgage Life Insurance Monthly CostTerm Life Insurance Monthly Cost
35$109.00$28.60
40$127.00$38.90
45$171.00$58.97
50$286.00$93.74
55$514.00$173.84
60$1,196.00$410.00
65$1,498.00$596.44

*Displayed monthly rates are provided for illustrative purposes only and are accurate as of 12/30/2023. Guaranteed universal life insurance rates are displayed applicants over 60.

To instantly see what a term insurance policy will cost you use the form below. In less than a minute you will be able to view coverage options and actual quotes from dozens of top-rated providers. You can also call us toll-free at 855-247-9555 to learn more.

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Is Mortgage Life Insurance Worth It?

While mortgage life insurance is NOT the best option for most people, there are always exceptions. If you have serious health issues that prevent you from qualifying for any type of traditional life insurance, mortgage life insurance is going to be your only option.

This is also the case for individuals with lifestyle choices that make them a higher risk for life insurance. Some examples include heavy cigarette smokers and those with dangerous hobbies or occupations like skydiving, cave spelunking, flying an experimental aircraft, or dismantling explosives.

Even considering these rare exceptions, mortgage life insurance is not worth it for most people. If you have some health issues, securing an affordable term life insurance policy shouldn’t be an issue. You might not even have to take a medical exam depending on your overall age and medical history.

Most life insurance providers will overlook occupations that could be considered hazardous including police officers, first responders, and commercial pilots. Even hobbies like smoking an occasional cigar or scuba diving are a non-issue with many highly rated life insurance companies.

Mortgage Life Insurance for Seniors

We often speak with seniors that want to purchase mortgage life insurance because they cannot find a term policy that will outlast their mortgage. Even in these situations, we would not recommend mortgage life insurance because there are cheaper options available.

Term life insurance policies are limited to 20 years for applicants over 70, but permanent life insurance is available until age 79. While the cost of any sizeable life insurance policy after 75 is too expensive for most, these policies offer lifetime coverage that is more affordable than mortgage life insurance.

Even applicants in their 50’s and 60’s can secure life insurance until the age of 100, or later, for less than the cost of a mortgage life insurance policy. In addition to saving money, this strategy allows you to have more coverage later in life and the option to keep your policy active after your home has been paid off.

With a mortgage life insurance policy, your coverage will end as soon as you pay off your house. A mortgage life insurance policy will also decrease the amount of coverage it offers to match your mortgage balance, but your payments will remain the same, regardless of how much you owe.

That makes these policies less valuable as you pay down your mortgage. A permanent life insurance policy on the other hand allows you to reduce your policy’s death benefit for affordability. If you do not want to decrease your coverage, you can keep the additional coverage for your loved ones.

Mortgage Life Insurance Limits

The amount of mortgage life insurance you can qualify for is equivalent to the amount of your mortgage. In other words, you cannot purchase a mortgage life insurance policy with a death benefit that is larger than your current mortgage balance.

However, if you buy a traditional life insurance policy for mortgage protection, your life insurance provider will consider your age and current income when determining the amount of coverage available to you. Life insurance providers use a formula known as income multipliers which we outlined below.

Current AgeIncome Multiplier
30 to 4030 to 35 times your annual income before taxes
41 to 5020 to 25 times your annual income before taxes
51 to 6010 to 15 times your annual income before taxes
61 to 70Up to 5 times your annual income before taxes

For example, if you are 40 years old and you gross $80,000 a year before taxes, you will automatically qualify for up to $2.8 million dollars of life insurance coverage with most traditional term and permanent life insurance providers. Insurers can also consider other factors like net worth if more coverage is needed.

Mortgage Life Insurance Companies

There are hundreds of life insurance companies, but only a few providers offer true mortgage life insurance. One of these companies is Veteran’s Mortgage Life Insurance, or VMLI, a government-backed provider available to applicants under the age of 70 that were severely disabled during their service.

TruStage also offers mortgage life insurance, but they do not sell directly to customers. Instead, they partner with credit unions that want to offer mortgage life insurance to their customers. TruStage offers the insurance products while the credit union provides the customer details for marketing.

Some of the providers that offer term life insurance for mortgage protection include: Prudential,Transamerica, Pacific Life, John Hancock, SBLI, Corebridge, Protective, Penn Mutual, Lincoln Financial, Mutual of Omaha, Securian, Mass Mutual, North American, Guardian Life, and Symetra.

You can instantly compare quotes from these companies and dozens of other top-rated life insurance providers by entering your information in the form below. Our agency represents 63 top-rated life insurance providers, and we offer free quotes to help our visitors estimate the cost of their coverage.

Mortgage Life Insurance FAQs

Here are some of the most common questions we get from potential clients that are in the market for mortgage life insurance:

What’s the purpose of mortgage life insurance?

Mortgage life insurance is a specific type of life insurance that will pay off your mortgage balance if you pass away. People purchase mortgage life insurance to make sure their family will be able to keep their current home if they die unexpectedly.

Is mortgage life insurance a good idea?

It is always a good idea to protect your mortgage with a life insurance policy, but most people choose term life insurance over mortgage life insurance because of the additional benefits it offers and its lower cost.

Can you get life insurance on your mortgage?

Yes, you can purchase life insurance on your mortgage. The death benefit from a life insurance policy can also be used to pay off credit card debt, medical bills, leave an inheritance, or provide a source of income replacement to your loved ones.

How much does mortgage life insurance costs?

The cost a of mortgage life insurance policy varies greatly from lender to lender but for healthy non-smoking individuals under the age of 59, it tends be at least two to three times more expensive than a comparable 30-year term life insurance policy.

What’s the difference between PMI and MPI?

Private mortgage insurance or PMI is not life insurance, it is required by most lenders when a home buyer has a down payment of less than 20%. Mortgage protection insurance or mortgage life insurance pays off the balance of the mortgage if the policyholder dies before their house is paid off.

The Bottom Line

Everyone should protect their mortgage with a life insurance policy, but this doesn’t mean you should purchase mortgage life insurance. Term life insurance is a better option for most people because it is less expensive, more flexible, and it can be customized to your unique needs.

Our agency works directly with 63 top-rated life insurance providers to make sure our clients are always matched with the best life insurance policy for their situation and budget. Most importantly, our consultative shopping service is completely free, and there is no cost to apply for life insurance.

Give us a call today at 855-247-9555 or click on the free quote form below to instantly compare life insurance rates online, before speaking to a licensed agent.

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Written by:

Clifford Pendell

Clifford Pendell

Managing Partner and Co-founder

Cliff is a licensed life insurance agent and one of the owners of JRC Insurance Group. He has helped thousands of families of businesses with their life insurance needs since 2012 and specializes with applicants who are less than perfect health. In his spare time he enjoys spending time with family, traveling, and the great outdoors.

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