Mortgage protection insurance is a type of policy that covers the balance of your home loan in the event you pass away. Most mortgage protection insurance policies have declining balances, meaning the coverage amount decreases as you pay off your mortgage, with terms of 30 years or less. Unlike a traditional insurance policy, your lender will receive the proceeds from your policy upon your death, which will be used to pay off the balance of your mortgage.
For people in good health, a traditional life insurance product like a term life insurance policy is typically the best option for mortgage protection. However, if you’re in poor health or you’re a veteran or military service member with a qualifying disability, then mortgage protection insurance might be right for you.
We looked into three dozen companies to find the best mortgage protection insurance options. Not only did we consider each provider’s reputation and financial stability, but we also evaluated what it takes to get a quote and how much it costs, who can qualify, and what types of policies are available.
The Best Mortgage Protection Insurance for 2021
- Best Overall: New York Life
- Best for Poor Health: Globe Life Insurance
- Best for Seniors: Mutual of Omaha
- Best for Young Families: AIG Direct
- Best for Low Premiums: Northwestern Mutual
- Best for Veterans: Veterans’ Mortgage Life Insurance
Best Overall : New York Life
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New York Life
Why We Chose It: New York Life offers multiple life insurance policies including term, whole life, and universal life that can be customized to fit a wide variety of mortgage protection needs.
Superior financial strength rating
Long history of operations dating back to 1845
Life insurance options for a variety of needs
Must apply with an agent
Average pricing isn’t available
No specific discounts are advertised
New York Life was founded in New York City in 1845 and the company is focused on helping people and communities build better futures for themselves and their loved ones. It’s paid dividends every year since 1854 and made almost $300 million in donations since 1979. New York Life also has a superior A++ financial strength rating from AM Best. Plus, you can customize your life insurance policy to fit your mortgage protection needs.
The company’s excellent reputation and customizable options are why we selected New York life for the overall best mortgage protection insurance option.
With New York Life, you can choose from several different life insurance policies that can be customized for your mortgage protection needs. In doing so, you’ll get to factor in expenses related to your property, like maintenance fees and property tax payments. The costs are typically less than with a standard mortgage protection insurance policy and there are even options for people up to 90 years of age.
If you pass away, the benefits will be paid directly to your loved ones rather than your mortgage company. You can make a claim online or by mail and you can even get bereavement support.
To get a quote, you’ll need to speak with an agent and average pricing isn’t available.
Read the full New York Life Insurance Review
Best for Poor Health : Globe Life Insurance
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Globe Life Insurance
Why We Chose It: Globe Life Insurance doesn’t require a medical exam nor does it ask any health questions, meaning even people with health conditions can get coverage up to $350,000.
Good financial strength rating
No health questions or medical exam
Standard life insurance policies also available
Long history of operations
Must apply with an agent
No specific discounts are advertised
Average pricing is unavailable
Our choice for best mortgage protection insurance for poor health, Globe Life, was founded in 1900 and is headquartered in McKinney, Texas. The company has a good Better Business Bureau ranking and a strong financial strength rating per AM Best Rating Services. With Globe Life, you can get $50,000 to $350,000 in mortgage protection insurance regardless of your health, as long as you’re between the ages of 18 and 69 years old. You won’t be asked any questions about your health nor will you be required to get a medical exam. Plus, rates start as low as $5.50 per month.
Your premiums with Globe Life will never increase, and your policy includes a variety of other guaranteed benefits at no cost, including accidental death benefits, dismemberment benefits, and paralysis benefits. If you need to file a claim with Globe Life, you can do so online or by mail. For the quickest processing of your claim, make sure to include all required information (e.g., death certificate, obituary, police reports).
If you aren’t in poor health, Globe Life offers other life insurance policies you can use for mortgage protection, including term life and whole life policies. To apply for mortgage protection insurance with Globe Life, you’ll need to speak with an agent.
Read the full Globe Life Insurance Review
Best for Seniors : Mutual of Omaha
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Mutual of Omaha
Why We Chose It: With Mutual of Omaha, seniors as old as 85 can choose from various insurance policies to best fit their mortgage protection needs, including term life, whole life, and guaranteed issue policies.
Superior financial strength rating
At least three life insurance policies seniors could use for mortgage protection
Policies can be issued up to age 85
Long history of operations dating back to 1909
Must apply online or with an agent to find out how much it’ll cost
Limits for the whole life policies for seniors are low at $40,000 or less
No specific discounts are advertised
Average pricing is unavailable
Mutual of Omaha was founded in 1909 and its headquarters are located in Omaha, Nebraska. The company has a superior A+ financial strength rating from AM Best. While you’ll pay the least for a term life insurance policy, other good options include a guaranteed issue or simplified underwriting whole life policy for mortgage protection.
Mutual of Omaha offers a guaranteed whole life insurance policy for people between the ages of 45 to 85 in most states (ages 50 to 75 in New York). In addition, it’s possible to qualify for a term life insurance policy with Mutual of Omaha up to the age of 80 years old with no premium increases. For these reasons, it’s our pick for best for seniors.
If you’re in good health, then one of the most affordable mortgage protection options you can choose is a term life insurance policy. One of the main factors that affect the price of the policy is age. You can either get a quote online or apply for this policy with an agent to learn how much it will cost. Coverage is guaranteed up to $25,000 without a medical exam and with no health questions. For pricing, you can apply online.
If you need a little bit more money, you can also apply with an agent for a whole life insurance policy with simplified underwriting (limited health questions and a shorter application process). This policy has two options: a level benefit plan up to $40,000 for those age 45 to 85, and a graded benefit plan up to $20,000 ($40,000 in Washington) for those 45 to 80 years old.
You can file claims with Mutual of Omaha online or by calling 1-888-493-6902.
Read the full Mutual of Omaha Life Insurance Review
Best for Young Families : AIG Direct
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AIG Direct
Why We Chose It: With AIG Direct, young families can lock in lower rates for the duration of their mortgage term.
Superior financial stability rating
Premiums are as low as $14 per month for a $250,000 term life insurance policy
Long history of operations
You’ll need to speak with an agent after submitting a request for a quote online
No specific discounts are advertised
Average pricing is unavailable
AIG Direct is a subsidiary of the American General Life Insurance Company (also known simply as AIG), which has an excellent financial stability rating of A with AM Best. AIG was founded in 1919, with operations located throughout the world. Younger families can benefit from a more affordable term life insurance policy for mortgage protection with fixed rates up to 30 years and rates as low as $14 a month for a $250,000 policy.
With AIG Direct, you can use term life insurance, one of the more affordable insurance options, for mortgage protection and benefit from premiums that won’t change for the policy’s duration. If you apply for a term life insurance policy while you’re young, your rate will usually be lower than if you wait to apply until you're older.
It’s easy to get a personalized quote for term life insurance with AIG Direct by submitting your information online. Once you’ve submitted this information, an agent will contact you to discuss it. In the event you need to file a claim, this process can be completed online with AIG.
Read the full AIG Life Insurance Review
Best for Low Premiums : Northwestern Mutual
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Northwestern Mutual
Why We Chose It: Northwestern Mutual can be a good option for healthy people, as they can benefit from the lowest premiums by choosing policies with terms matching their mortgage.
Superior financial stability rating
Pricing for a healthy male age 35 or lower could be less than $1 a day for a term policy
Long history of operations dating to 1859
You’ll need to speak with an agent to apply
No specific discounts are advertised
Average pricing is unavailable
In business since 1859 and with a superior financial stability rating of A++ from AM Best, we chose Northwestern Mutual as the best mortgage protection insurance option for low premiums due to its low rates. For example, with Northwestern Mutual, a policy for a healthy 35-year-old male purchasing a $500,000 term life insurance policy up to age 80 can expect a premium starting at $306 a year—less than $1 a day.
To figure out exactly how much a term life insurance policy with Northwestern Mutual will cost, you’ll need to speak with an agent. Keep in mind, if your goal is simply to make sure your loved ones can pay off your mortgage, then you might be able to choose a shorter term (e.g., 10, 20, or 30 years) and benefit from lower premiums.
If you ever need to file a claim, you can do so quickly and easily online or you can call 1-800-388-8123 for assistance.
Read the full Northwestern Mutual Life Insurance Review
Best for Veterans : Veterans’ Mortgage Life Insurance
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Veterans’ Mortgage Life Insurance
Why We Chose It: It’s a mortgage protection insurance program designed for veterans and service members with qualifying disabilities related to their military service.
Offers an affordable option for veterans
Easy to estimate your cost using tools provided by the VA
Your policy is portable if you move
Must have a service-connected disability
Must be a recipient of a Specially Adapted Housing Grant
Benefits are paid to your mortgage company
The best mortgage protection insurance for veterans is the Veterans’ Mortgage Life Insurance program offered by the U.S. Department of Veterans Affairs (VA). Service members and veterans can get up to $200,000 in mortgage life insurance if they meet the VA’s strict eligibility requirements.
To qualify for the Veterans’ Mortgage Life Insurance policy, you need to meet all of the following requirements:
- You must have a severe disability that the VA concluded was caused or worsened by your military service.
- You must be the recipient of a Specially Adapted Housing (SAH) grant, designed to make it possible for you to live more independently.
- Your home must be titled in your name, and you must have a mortgage on it.
- You must be younger than 70 years old.
If you haven’t yet received an SAH grant from the VA, you’ll need to qualify before applying for mortgage protection insurance. To qualify for an SAH grant of up to $100,896, you need to be a homeowner and have a qualifying disability connected to your service. Examples of qualifying service-connected disabilities include the loss of more than one limb, the loss of a leg, blindness in both eyes, and some types of severe burns.
The VA mortgage insurance policy is decreasing-term insurance, meaning the coverage is reduced as you pay down your mortgage. It’s also portable, meaning you can take it with you if you move.
Your cost will depend on your age as well as the balance and remaining term of your mortgage (you can use the VA’s calculator to estimate the cost). Using this calculator, a 35-year-old can expect to pay about $35.06 a month for a $200,000 policy with a 30-year term.
Claims are filed with the VA, with all proceeds sent to your lender.
Final Verdict
We evaluated almost three dozen providers to find the best mortgage protection insurance options. Overall, we found that New York Life offered the best value for the most products at an affordable price. However, depending on your circumstance, you might benefit from a policy from another company.
For instance, if you’re in good health, you’ll usually get the best rates if you use traditional life insurance, such as a term life insurance policy, for mortgage protection. However, a mortgage protection insurance policy can be a good option if you’re in poor health. Plus, veterans and military service members with qualifying service-related disabilities can potentially get affordable mortgage protection insurance directly from the VA.
Compare Providers
| Provider | Why We Picked It | Best Policy Type(s) |
|---|---|---|
| New York Life | You can customize a variety of life insurance policies to fit your mortgage protection needs. | Term, Whole Life, or Universal Life |
| Globe Life Insurance | Even people in poor health can get covered, as medical exams aren’t required and health questions aren’t asked. | Mortgage Protection |
| Mutual of Omaha | Seniors up to age 85 can choose from several insurance policies to best fit their mortgage protection needs. | Term or Whole Life |
| AIG Direct | Young families can get lower rates for the duration of their mortgage term. | Term Life |
| Northwestern Mutual | People in good health can benefit from the lowest rates by choosing a policy with a term that matches their mortgage. | Term Life |
| Veterans’ Mortgage Life Insurance | Veterans and service members with qualifying disabilities can receive affordable insurance directly from the VA. | Mortgage Protection |
FAQs
What Is Mortgage Protection Insurance?
Mortgage protection insurance provides homeowners with a policy covering the balance of their mortgage in the event they pass away before it’s paid off. These policies typically have a term that matches the mortgage it’s intended to protect (up to 30 years), and the balance of the policy may decline as the policy is paid off. If you pass away, the proceeds are issued directly to your lender rather than a designated beneficiary. Plus, the proceeds can only be used to pay off your mortgage, unlike a term life insurance policy.
Keep in mind, mortgage protection insurance is not the same thing as private mortgage insurance, even though these terms are commonly confused since they’re so similar. Private mortgage insurance (PMI) is something that people who put less than 20% down on their home might have to pay in connection with their mortgage. PMI is designed to protect your lender in the event you default on your mortgage.
Do I Need Mortgage Protection Insurance?
If you have a mortgage and want to make sure any remaining balance is paid off when you pass away, then it’s a good idea to purchase some type of life insurance. People in good health are usually better off using a traditional life insurance product like a term life insurance policy because the rates are more affordable. Plus, the proceeds can be issued directly to their loved ones rather than their lender.
However, mortgage protection insurance can be good for people with health conditions and veterans with qualifying service-connected disabilities because it typically doesn’t require you to get a medical exam or answer questions about your health. Plus, if you’re a veteran with a disability connected to your military service, you might be able to qualify for affordable mortgage protection insurance with the U.S. Department of Veterans Affairs.
What Is the Difference Between Life Insurance and Mortgage Protection Insurance?
Mortgage protection insurance is a type of insurance specifically designed to pay off the balance of your mortgage if you pass away. The proceeds are paid directly to your lender and can’t be used for anything other than repaying your mortgage. This is different from other life insurance products like a term life insurance policy where the proceeds are issued directly to your loved ones and can be used for a wide variety of things.
What Does Mortgage Protection Insurance Cost?
The cost of mortgage protection insurance depends on many factors such as your age, the term of the policy, and the size of the policy. The cost also depends on the provider you choose. You can expect the rates for mortgage protection insurance policies to start as low as $5.50 a month for people between the ages of 18 and 69 and for policies between $50,000 and $350,000.
Typically, the younger you are and the smaller your policy’s size, the lower the price you’ll pay.
How We Chose the Best Mortgage Protection Insurance
We researched over 30 providers to find the best mortgage protection insurance options to fit the needs of a wide variety of people. In addition to the providers’ reputations and financial stability, we considered the types of policies, how much they cost or what you need to do to get a quote, and what it takes to qualify for a policy.
All of the mortgage protection insurance options on our list are offered by reputable companies and provide good protection for what’s usually your most valuable asset.