What is Mortgage Protection Insurance?
Are you responsible for the housing costs for your loved ones? If you are worried about how they will be covered if you suddenly pass away, you may want to consider mortgage protection insurance. It’s a form of life insurance that pays off your mortgage loan if you should die.
How Does Mortgage Protection Insurance Work?
Mortgage protection insurance is a type of term life insurance that you make premium payments on for the duration of the policy term and are only covered while the policy is in place (ie: 30 years). Many insurers issue policies that are the same length as the term of the covered mortgage, but policies may be available in 10 to 30 year increments. Once you reach the end of the term, you are no longer covered.
If you die during the coverage period, the death benefit is paid to the mortgage lender. Your loved ones will not directly receive any of the proceeds from the policy, but the policy will pay the mortgage in full so they do not have to worry about making house payments. Some mortgage protection policies also cover mortgage payments for a set period of time if you become unemployed or disabled. These are called living benefits, and a portion of the death benefit is used.
Mortgage protection is not the same as lender placed insurance, such as PMI. They won’t benefit your family if you pass away before your mortgage is paid in full. Mortgage Protection is purchased by the homeowner, for the homeowner’s family.
Since MPI is a term insurance policy, it is the lowest cost of insurance available. A young healthy individual, can get covered for 30 years and $100s of thousands of dollars for well below $100 per month. If you need a Term Policy that isn’t connected to your Mortgage, we can write those too. Click the Request a Quote button to get your quote.