The Hartford Mortgage Protection Plan?

Question

Has anyone heard about this and is it worth it?

I just bought a house and keep getting annoying letters from them telling me to sign up. They claim that if I die, then my mortgage will be paid off. What I want to know is are there any catches and will my rate go down as my mortgage amount goes down?

Any one have any insights on this?

Answer 1

I am a licensed insurance professional.  To answer your question, no, the premium does not go down as your mortgage decreases.  However, your coverage does not go down either.  The argument would be "if the loan is paid off I don't need the coverage".  In a perfect world that would be true.  However, the majority of homeowners never payoff their mortgage.  And if they do, there is always a need for the coverage.  Just because your house is paid off doesn't mean there isn't a need for life insurance.  Chances are if you received a letter, you are in the target age group. (25 - 45) The younger the applicant, and with no health issues, the premium is more affordable and it is locked in at that rate for life.  On the other hand, if you live to the end of the "term", which is typically 20 years, I can assure you the premium to renew will be astronomical.  With 24 years experience I have never had anyone over 60 tell me they had too much life insurance.  But I have had thousands tell me they wish they had taken an agents advice years earlier and locked in the rates.  Don't be fooled.  People think agents and insurance carriers want you to but UL/whole life insurance because it's more expensive. The truth of the matter, insurance companies would rather see you purchase a term policy.  Why?  Because the likelyhood of it ever resulting in a death claim is very low.  Industry wide the rate is 4%.  That means with a term policy, the insurance carrier has a 96% chance of never paying a claim.  On the other hand, if your term never "expires", sooner or later a death claim will be paid.  Just so you know....