Arizona homeowners
Mortgage protection insurance, explained honestly
If something happened to you, would the house stay paid for? That's the whole question. The answer is usually a term life policy sized to your loan, not the policy that arrives in the mail after closing.
Sullivan James is an independent insurance agency in Scottsdale. We compare several carriers and call you with real prices. No obligation.
Get my quotesWhat it is
Two products share one name
"Mortgage protection" gets used for two different things. The first is mortgage life insurance offered through a lender or by mail after you close. It usually pays the lender, and the payout shrinks as your balance goes down, while the premium often stays the same.
The second is an ordinary term life policy chosen to match your loan: an amount close to the balance, for a term at least as long as the years left on it. It pays your beneficiaries, not the bank. They can pay off the house, keep making the payments, or use the money for something more urgent. Many policies marketed as mortgage protection are term life with a rider that pays part of the benefit early if you become terminally ill.
Who should get the check
A policy that pays the lender settles exactly one bill. A policy that pays your family lets them decide, and sometimes the right call is to keep the low fixed-rate mortgage and use the money for income instead.
That flexibility is the main reason we usually recommend level term over lender-paid mortgage life. We'll walk you through both if you have an offer in hand.
Sizing it
Four numbers set the policy
You don't need a calculator for this. You need four numbers you already have.
The loan balance
Start with what you owe today, not the original loan amount. Add any HELOC or second mortgage you'd want gone.
The years left
Match the term to the loan. A new 30-year mortgage fits a 30-year term. If you plan to pay it off early, a 20-year term may be enough.
The rest of the household's needs
If your income also covers everything besides the mortgage, the house alone isn't the right number. Add income replacement while the kids are home.
What's already in place
Subtract life insurance you own. Count coverage through work last, because it usually ends when the job does.
Add up the needs and subtract what you already have. That's the amount we'll price across carriers.
Questions
The ones worth asking first
Is mortgage protection insurance the same as PMI?
No. Private mortgage insurance (PMI) protects the lender if you stop paying, and it doesn't pay anything to your family. Mortgage protection life insurance pays out if you die. The two are often confused because both show up around closing.
Is it better to buy mortgage life insurance from my lender or a term policy?
For most healthy homeowners, a term policy is more flexible. It pays your beneficiaries rather than the lender, and the benefit doesn't shrink as the loan balance falls. Lender or mail offers can make sense for some people with health issues, because underwriting can be simpler. We'll compare both if you have an offer.
Do I need a medical exam?
Often not. Many carriers use accelerated underwriting for healthy applicants and moderate amounts, based on your answers plus records they can already access. Some applications still need an exam, and we'll tell you up front which carriers would ask for one.
What if I refinance or move?
Your term policy isn't tied to the loan, so it stays in force when you refinance or sell. If you buy a bigger house, the question is whether to add coverage, not replace it.
Does it cover disability or job loss?
Term life pays when you die. Some policies add riders, such as an accelerated benefit for terminal illness, and some carriers offer others. Disability and job-loss protection are separate coverages. We'll tell you what each policy actually includes.
Is Sullivan James the insurance company?
No. Sullivan James is an independent insurance agency in Scottsdale, Arizona. Policies are issued by the carrier, and no coverage is in force until the carrier issues the policy and the first premium is paid.
Size it to the loan, then forget about it
Tell us a little about you. A licensed agent compares several carriers and calls with real prices, sized to your mortgage.
Get my quotesOr call (480) 382-7332 and talk to a licensed agent.
Sullivan James Insurance is an independent insurance agency, not an insurance company. Policies are issued and underwritten by the carrier, and all coverage is subject to underwriting approval, policy terms, exclusions and limitations. No coverage is in force until the carrier issues the policy and the first premium is paid. Riders and their availability vary by carrier and state. This page is general information, not tax, legal or lending advice, and is not an offer of insurance in any state where Sullivan James Insurance is not licensed.