Mortgage Protection Insurance
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What is mortgage protection insurance?
Mortgage Protection Insurance (MPI) is a type of life insurance that would specifically pay your mortgage in the case of your demise. It can help you save your home while also providing you with peace of mind. Purchasing a house is a big step in life and one of the most significant purchases you will make. If you were to die unexpectedly Mortgage Protection Insurance pays the outstanding mortgage payments. In terms of how it works, mortgage protection insurance operates similarly to term life insurance. You purchase a policy, pay your premiums on time, and your coverage expires at the end of the policy term. MPI ensures that your mortgage obligations are met in the event of a death.
How does MPI work?
MPI reduces both the lender’s risk of providing a loan to you, allowing you to qualify for a loan that you would not have been able to acquire otherwise and also protecting you and your family from losing your home in case of your demise. MPI is usually required for borrowers who make a down payment of less than 20% of the home’s purchase price.
Some advantages about MPI
- Some MPI policies also pay mortgage payments on your behalf (for a limited time) if you become unable to work, disabled, or become unemployed.
- None of your family members would have to handle any money or do anything really, any proceeds upon your untimely demise from MPI would go straight to the lender and pay your mortgage balance off.
- Approval is guaranteed. Even if you have a bad health condition there is no Medical Exam or Lab Test required.
Because of the high acceptance rates, there are very few reasons why an insurance company would reject you down for mortgage protection insurance. MPI may just be the greatest way to safeguard your family’s level of living.
How much does MPI cost?
Though the cost of coverage will be higher than if you just cover one person, a mortgage insurance policy will almost certainly be less expensive than purchasing two separate term life insurance policies. Insurance companies analyze your age, smoking status, mortgage length, and the amount left on the mortgage when calculating MPI premium costs. Another cost consideration is if the policy covers both spouses. In such an instance, if one of the spouses dies, the corporation will pay a death benefit.
Drawbacks of Mortgage Protection Insurance
Despite the fact that the value of your home is depreciating over time, you’ll most likely pay the same rate for MPI. Balancing your budget can be difficult if your mortgage payment is relatively low. If you lose your job, your insurance will not pay you the same amount as your regular monthly salary. Instead, they will pay your lender directly for whatever is due for that month at that point in time. So YOU aren’t really covered, your house is.
An alternative to this is possible with regular life insurance which we can most certainly help you with. Everyone has different needs, different assets to protect, and different lives so we do our best to understand you and your needs and wants.
Get in touch with us
Reach out to one of our licensed and experience agents for your Mortgage Protection needs. We’ve got you covered!