You refinanced. Does the protection still match the loan?

At a glance

What it is

Life insurance bought with the mortgage in mind; usually plain term, sometimes a decreasing benefit

Who gets paid

Your beneficiary, in cash. Not the lender, unless you assign it

Lender required?

No. Mortgage life insurance is optional and separate from lender-required hazard insurance and PMI

Common terms

15, 20 or 30 years to match the loan

Why a refinance is the moment to review coverage

A refinance changes the balance, the payoff date and often the payment. A policy bought for the original loan may now be too small (cash-out refinance) or run past the new payoff (shorter term). Reviewing the amount and term with a licensed professional takes minutes and often costs nothing to change.

Level term vs. decreasing mortgage insurance

Some mortgage products have a death benefit that decreases as the loan balance falls, and a premium that stays flat. They can look cheaper up front but pay less each year. A level term policy for the original balance keeps the full amount for the whole term and usually costs about the same, which is why most licensed professionals compare both before recommending one.

Do you still need life insurance in retirement?

Sometimes. A surviving spouse who would lose a pension or the larger Social Security check may need income replacement. Final expenses, a mortgage still owed, or a plan to leave money to children or a charity are other reasons. If none apply, letting a term policy end can be the right answer. A policy review looks at what would actually happen to the survivor’s budget.