ServicesMortgage Protection
Mortgage Protection Insurance in Palo Alto
If you die before the mortgage is paid off, this coverage gives your family money to cover the loan, whether that means clearing it or keeping up the monthly payment. We match the policy to your balance and term, then check it again as the loan changes, so it doesn't drift out of date.
What mortgage protection covers
Mortgage protection is life insurance built around one debt: your mortgage. Should you die before the policy term ends, the carrier pays out, and the people you leave behind are not left holding a payment they cannot carry. Most of the time we set it up as a term life policy with your family as the beneficiary. That way the choice is theirs: clear the loan, keep up the monthly payment, or cover something more urgent first.
The policy you buy today is sized to the loan you have today. Loans don't sit still. People refinance, take a second loan, pay down principal or sell and buy again. Bay Area balances run large, so a gap of a few years between the policy and the loan can mean a big shortfall. Our work doesn't stop at the signed policy. We come back to it when the loan changes and adjust, rather than leaving you to find out later that the numbers no longer line up.
What you get when you work with us
A look at the actual loan
We start with your balance, rate, years left and monthly payment. The coverage amount and term come from those numbers, not from a round figure picked out of the air.
Level or decreasing coverage, explained
With decreasing coverage, the amount drops year by year as you pay the loan down, and the premium tends to be lower. A level policy pays the same figure in year one as in year twenty, so anything beyond the remaining balance goes to your family. We show you both and say which one we think fits.
Beneficiary set up the right way
We walk through who gets the money and in what order. Naming your family, not the lender, keeps the choice in their hands.
Riders that make sense for a mortgage
Some carriers offer riders that help if you become disabled or seriously ill before the loan is paid. We tell you which ones are worth the extra premium and which ones aren't.
Check-ins when the loan changes
A refinance, a sale or a big principal payment is a good time to look at the policy again. We review it with you and adjust coverage if the old amount no longer fits.
Signs it's time to look at mortgage protection
- One income carries the payment
- If most of the mortgage comes out of one paycheck, losing that person would hit hard and fast. This is the most common reason people call us.
- You just bought or refinanced
- A new loan means a new balance and a new term. Any coverage you had before was sized to something else.
- Work coverage is your only plan
- Group life through an employer is often one or two times salary and usually ends when the job does. That rarely covers a large loan balance.
- Your policy is older than your loan
- If you bought coverage years ago and have refinanced or moved since, the term may run out well before the mortgage does.
- Kids or a partner live with the loan
- Anyone who would need to stay put or sell in a hurry has a stake in whether the payment can be made.
How it works, start to finish
- 1
A phone call about the loan
We ask about your balance, payment, years left and who depends on you. Have a recent mortgage statement nearby if you can. It makes the call shorter.
- 2
Options laid side by side
We show a few policies with the coverage amount, term and monthly premium for each. You see what changes the cost before you pick anything.
- 3
Application and health questions
The carrier asks about your health and history. Some policies need a short medical exam, others don't. We tell you which applies before you apply.
- 4
Policy delivered and reviewed
When the carrier approves you, we go over the policy with you, check the beneficiary lines and make sure the term runs at least as long as the loan.
- 5
Upkeep over the years
When you refinance, sell or pay the loan down, call us. We look at whether the coverage still fits and adjust it if it doesn't.
What moves the price
Premiums depend mostly on you and on the loan. We can't quote a number until we know both. Here is what we look at, so you know where the cost comes from.
- Age and health
- Younger, healthier applicants pay less. Tobacco use raises the premium more than almost anything else.
- Size of the loan
- More coverage costs more. Matching the amount to your actual balance keeps you from paying for coverage you don't need.
- Length of the term
- Longer terms carry higher monthly premiums, since the carrier is on the hook for more years. We line the term up with the years left on the loan.
- Level or decreasing
- Decreasing coverage tends to be cheaper, since the carrier's risk gets smaller every year. A level policy carries a higher premium, and in exchange any money beyond the loan stays with your family.
- Riders
- Disability or illness riders add to the premium. We only suggest them when they fit your situation.
Mortgage protection questions
- Is this the same as the PMI my lender charges?
- No. PMI protects the lender if you stop paying. Mortgage protection insurance protects your family if you die. You may have both, and they do different jobs.
- Does the money go to the bank or to my family?
- With the way we usually set it up, it goes to the beneficiary you name, typically your spouse or partner. It's their call what happens next. They might clear the balance, keep paying month to month, or hold some back for bills that can't wait. Some lender-sold policies pay the bank directly, which leaves your family no say.
- What if I refinance or sell?
- A refinance or a sale doesn't cancel your policy. It keeps going as long as the premiums get paid. The catch is that the amount and term may no longer line up with the new loan. Give us a call and we'll look at whether to leave it alone, add to it or change it.
- I have life insurance through work. Isn't that enough?
- It might be, but check the amount against your loan balance. Group coverage is often far below a mortgage and usually ends if you leave the job. We can look at both and tell you plainly if there's a gap.
- Do I need a medical exam?
- Sometimes. It depends on your age, the coverage amount and the carrier. We'll tell you up front which policies need one and which don't.
- Should this be my only life insurance?
- For some people it is. Others also want coverage for income or final costs. Our term life insurance and final expense insurance pages explain those options.
Make sure the coverage matches the loan
Tell us your balance and how many years are left. We'll show you what fits and check it again when the loan changes.