mortgageprotectioninsurance
For Life's Unexpectedness

Mortgage Protection Insurance.

Mortgage protection insurance (MPI) is a type of life insurance designed to pay off your mortgage if you were to pass away — and some policies also cover mortgage payments (usually for a limited period of time) if you become disabled.
If you’ve recently closed on a mortgage or home equity line, you’ve probably received a flood of solicitations for mortgage protection insurance — usually disguised as official communication from your mortgage lender with few details on what they’re selling.

Mortgage protection insurance (MPI) is a type of life insurance designed to pay off your mortgage if you were to pass away — and some policies also cover mortgage payments (usually for a limited period of time) if you become disabled.

Note: Don’t confuse MPI with private mortgage insurance (PMI), which protects the lender if you default on the loan. With PMI, your family would still owe the balance of the loan if you passed away.
Mortgage Protection Insurance

FAQ.

  • Guaranteed approval. Even if you’re in poor health or work in a dangerous profession, there is guaranteed approval with no medical exams or lab tests.
  • No guesswork. The check goes straight to the lender for the exact mortgage balance, so there’ll always be enough and your family won’t have to handle the money.
  • Disability protection. Some MPI policies make mortgage payments (usually for a limited time) if you become disabled or lose your job.
  • Lack of flexibility. MPI gives beneficiaries no choice. The insurance pays off the mortgage — nothing else. This means your family can’t use the money for anything else.
  • Higher cost. MPI typically costs more than term life insurance, especially for healthy, responsible adults. And some policies don’t guarantee the price will remain the same over the term of coverage.
  • Shrinking coverage. As your mortgage balance declines, the policy’s payout declines with it. That means you’ll end up paying the same cost for less coverage over time.
  • More restrictive age limits. MPI policies often have more restrictive issue ages than term life. For example, some insurers won’t issue a 30-year MPI policy to anyone over age 45.

MPI isn’t a mortgage requirement. No matter which type of loan you choose, you can buy a home without paying for MPI. Though your lender may recommend a policy, it’s completely up to you whether you decide to buy.

If you buy a mortgage protection insurance policy, you’ll continue to make monthly premium payments for the duration of the policy term. Your insurance company can cancel your benefits if you stop making your premium payments. Like most other types of insurance, you’re free to cancel at any time. However, keep in mind that you won’t get any of the money back that you paid to your insurance provider when you cancel.

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