Explore the Benefits of Mortgage Protection Insurance
Purchasing a home is a significant investment. Most people commit to 15-30 years of payments when signing a mortgage contract. So, what happens to your debt if you die or become disabled? Will your family really have to pay your mortgage or be forced to sell your home?Mortgage protection insurance can help your family cover your mortgage under certain circumstances. This can help avoid foreclosure and prevent your family from having to sell your home. Talk to your local broker to explore the benefits of mortgage protection insurance and determine whether it’s the right option for your family.
What Is Mortgage Protection Insurance?
Mortgage protection insurance or MPI is an insurance policy that covers your mortgage payments if you die before your loan is paid off. Some policies also provide temporary financial protection if you lose your job or become disabled.Do I Need Mortgage Protection Insurance?
Most MPI policies work the same as traditional life insurance policies. However, there are some differences. You’ll pay a premium every month to keep your coverage current like conventional life insurance. If you die during your policy term, a payout will be sent to cover a set number of mortgage payments. This varies based on the terms of your policy.MPI differs from traditional insurance in the following ways:
Policy BeneficiariesThe beneficiary is your mortgage company and not your family or loved ones with an MPI. Instead of your chosen beneficiaries receiving a lump sum of cash, the payment goes directly to your mortgage lender. While this can help keep your family in your home, your family needs to understand that they can’t depend on this type of insurance to cover bills and expenses.
Acceptance Rates and Monthly Premiums
Unlike traditional life insurance, MPI policies have guaranteed acceptance. This means you won’t pay extra or be denied based on your age or health. You also won’t have to commit to a medical exam or answer any health questionnaires. While this is an excellent advantage for those with health concerns or high-risk professions, it also means that the average premiums are higher than a typical insurance policy.
Rules and Regulations
Finally, the rules and regulations surrounding an MPI policy differ from that of traditional policies. There are several strings attached to mortgage protection insurance that can change your benefits. For example, the longer you hold your policy, the less valuable it is. Some companies also require you to purchase your policy within 24 months of closing.
How Much Does Mortgage Protection Insurance Cost?
The cost of your mortgage protection insurance depends on several factors. When you apply for your coverage, your insurance company will look at the remaining balance of your mortgage, the remaining term, your age, job, and overall risk. While you won’t be denied based on your age and risk level, this may change your premium costs. At a bare minimum, you can expect to pay at least $50 for your mortgage premium insurance policy.Is MPI Worth It?
In general, investing in mortgage protection insurance is typically worthwhile. However, the benefits of this protection depend on your specific needs. If you are a new homeowner with significant health concerns that can impact your long-term well-being, MPI is a great option to protect your family. MPI is also a great way to secure your loved ones’ financial future if you have difficulty getting approved for a traditional life insurance policy.Talk to your local insurance broker to explore your options and determine if mortgage protection insurance is right for you.
Life Insurance by Monique Navarro Is Here to Help!
As an independent life insurance broker, Monique Navarro is here to help you find the best coverage options for your specific needs. Rather than going direct, working with us allows you to get the best rates on your coverage premiums. As a field underwriter, you’ll also get more accurate quotes than working with a third-party underwriter. All of our policies come with living benefits. This means you’ll be offered a certain amount of funds if you become terminally ill or injured.If you’re exploring your life insurance options, we’re here to help! Contact us today to schedule your free, no-obligation consultation and determine if mortgage protection insurance is right for you.