A mortgage protection calculator that shows the balance falling year by year

Life agencies and producers who write mortgage protection, and P&C agencies that already insure the home and want to round out the account. It suits any agency whose current mortgage protection leads arrive with an address and a loan amount but no sense of what the homeowner actually wants covered.

Home insurance agencies are in a strong position: they already know when a client buys a house. A link to the calculator in a new-homeowner welcome email lets the client consider life coverage on their own schedule, and the lead lands on the same contact record if their email matches.

Loan officers and real estate partners who refer clients to your agency can share the direct link, so the referred homeowner arrives having already run their own numbers.

It uses standard fixed-rate amortization: from the balance, rate and years remaining it computes the monthly principal and interest, the balance after five and ten years, and the coverage to pay off the loan today plus a cushion of monthly payments. Existing coverage is subtracted to show the additional coverage needed.

The amortization view makes the trade-off visible. Early in a loan the balance falls slowly because most of each payment is interest, so decreasing term coverage that tracks the balance leaves less margin than many homeowners assume.

It does not model extra payments, adjustable rates, escrow or late fees, and it does not estimate premiums. Mortgage protection is usually decreasing or level term life insurance, priced by the insurer on the applicant's age and health.

• Coverage to pay off mortgage, including the payment cushion
• Monthly principal and interest
• Balance in 5 years and in 10 years
• Additional coverage needed after existing insurance

Because many homeowners believe the mortgage insurance on their loan statement protects their family. Private mortgage insurance and FHA mortgage insurance premiums protect the lender if payments stop; they pay nothing to the household. The calculator explains the difference, which clears up the most common misunderstanding before your producer calls.

The calculator's definitions also distinguish decreasing term from level term, and note that with most policies the benefit goes to a beneficiary who decides how to use it, while some lender-sold policies pay the lender directly. Prospects arrive understanding the choice they are making.

Living benefits riders, such as disability or critical illness riders, come up often in mortgage protection. The definitions describe them in general terms and point out that wording varies by insurer, leaving the specifics to your producer.

The rest of the household's income need. A mortgage is often the largest single debt, but the family still needs income for everything else. A full needs analysis, and protection against a disability that stops the payments while the borrower is alive, are the natural next conversations.

Offer the life insurance needs calculator for the wider picture and the disability insurance calculator for the other risk a household carries during the life of a mortgage: being unable to work. Bundle all three in one widget on your homeowner page.