When you take out a mortgage for a home of your very own, the plan is to live long enough to pay it off and be able to pass the property down to a family member or sell it at some point after. But what happens if you pass away before the mortgage can be paid in full? If you’ve got a great life insurance policy, the payout might be enough to keep your loved ones in the home and financially secure. For far too many homeowners and their families, this is unfortunately not the reality of their lives. That’s why mortgage protection insurance can be a tremendous helping hand when the unexpected takes a loved one away from a family that’s depending on them to pay the mortgage.
Below, we’ll explain what mortgage protection insurance, or MPI, is and how it can benefit you, your investment, and your family.
What is MPI?
Mortgage protection insurance is a type of life insurance policy that focuses solely on paying toward your mortgage in the event of the policy holder:
- Becoming disabled and unable to work
- Falling ill or becoming injured in a way that makes it impossible to work, either in the short-term or the long-term
- Passing away for any reason
When the policy goes into effect and a payout is made, the funds are not directly given to a beneficiary or the policy holder themselves. Instead, the money is given to the mortgage lender as a means of paying off the mortgage directly. If any amount remains, that amount will go to a listed beneficiary.
If you choose to get MPI, the monthly premiums can be bundled into your monthly mortgage payments.
Who Should Get Mortgage Protection Insurance?
You can get such a policy in addition to your existing policy or as your sole form of life insurance. Many homeowners choose the latter route when they are not a good candidate for great life insurance coverage and/or rates due to their health or age. Generally speaking, the requirements to obtain a mortgage protection insurance policy are less demanding than traditional life insurance.
Mortgage protection insurance is also a great solution for those who aren’t positive that their existing life insurance policy will be enough to cover their mortgage in the event of their passing.
Mortgage protection insurance is never a bad idea, as it offers a layer of protection against the unexpected. And when you have something as important as your home and its mortgage on the line, why not get as much coverage as you can?