Mortgage Protection
Protect Your Investment with Affordable Insurance
Buying a house is a big investment that comes with a big commitment: paying off your mortgage. However, doing this requires specific steps, and having to make monthly mortgage payments can be stressful—on top of your other financial obligations.
If you pass away before the mortgage is fully paid off, what would happen to your family? Since you don’t want to leave them in a bad position, consider mortgage protection insurance.
What Is Mortgage Protection Insurance?
Mortgage protection insurance (MPI) is a type of insurance policy that can help your loved ones cover your mortgage under certain conditions. Some policies will offer temporary coverage if you lose your job or become disabled after an accident. So, you can avoid foreclosure if you’re unable to work to pay the mortgage.
You may hear it referred to as “mortgage life insurance” because most policies pay out when the policyholder dies.
Key Things to Know
- MPI is not the same as PMI (Private mortgage insurance).
- Skip the underwriting process – no medical exam.
- Most people buy a policy within 24 months after closing on the loan.
- The longer you hold your policy, the less valuable it is.
Where to Buy Mortgage Protection Insurance
If you think MPI might be right for you, there are a few ways you can purchase a policy. You can buy one through your mortgage lender, through a private insurance company, or through a life insurance provider.
We’re an independent agency that has access to these life insurance providers, and we can help you compare coverages and costs.
Coverage Details
Mortgage protection insurance offers coverage for a term, i.e., the length of your mortgage. So, if you take out a 30-year mortgage, you can purchase a 30-year mortgage protection policy. You can cancel at any time, so if you pay off your house early, you don’t have to keep making payments.
Important Note: MPI is different from (traditional) term life insurance. If you pass away, your family doesn’t receive a lump sum of cash like they would with a standard life policy. Instead, the money goes right to your lender.
Besides that, most MPI policies are like traditional life insurance policies: you pay the insurer a monthly premium, which keeps your coverage active and ensures your protection. If you pass away during the policy term, your provider pays out a death benefit that covers a certain number of mortgage payments.
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Cost Details
To determine the cost, insurance companies will consider these factors:
- Your Age
- Your Occupation
- The remaining balance of your mortgage loan
- How much time is left in your loan term
So, if you’re 70-years-old taking out a policy on a $300,000 mortgage, it will cost more than a 30-year-old purchasing a policy for a $200,000 mortgage.
MPI policies have guaranteed acceptance. So, this type of policy is especially helpful for homeowners with underlying health conditions, those who work a high-risk job, and/or a young person having trouble getting approved for life insurance.
The quickest, most accurate way to figure out costs is to contact us.
Making Insurance Easier
I can help make mortgage protection insurance easier so you can have peace of mind and focus on what really matters. Call today.