Mortgage payment protection insurance
Mortgage payment protection insurance covers the cost of mortgage payments in case if you get sick or lose your job. In other words, Mortgage protection insurance policies are type of life and disability insurance. Generally speaking, Mortgage protection insurance (MPI) covers only the principal and interest portion of mortgage payment. Fees like HOA dues, property taxes etc are not covered by MPI policies and would be your responsibility.
Some policies are aimed to help those who live in your home or your loved ones make mortgage payments if you die. For example, if you die with a mortgage balance and you have an MPI policy, your insurer pays the remaining amount directly to your lender. Therefore your partner or your heirs won’t have to worry about making any remaining payments or losing your home.
İn other cases, like loosing your job or something that prevent you from working, like disability MPI policies will help you to cover or at least reduce your monthly mortgage payments. Conditions for these policies vary.
Do you need mortgage protection insurance?
MPI is not required and is not always a smart move from a financial point of view.
You can receive similar to MPI policies which will be enough to cover life insurance policy. İt is called DIME (Debt, Income, Mortgage, Education) method, which takes your mortgage into account when you decide how much life insurance to buy.
Pros and Cons of MPI
As you know that your home is most valuable asset, therefore mortgage protection insurance providing another layer of safety. Advantages of using MPI following:
- Guaranteed acceptance
Most MPI policies are issued on a “guaranteed acceptance” basis. This can be beneficial for people who have health problems and who either have to pay high rates for life insurance or are struggling to get a policy.
- Peace of mind
Nowadays we live in unstable economy. An MPI’s post-job payout policy can go a long way if you find yourself unemployed.
As we mentioned above, MPI is not required and it an optional insurance. Therefore you have many reasons to consider other traditional life insurance instead of MPI. Cons of MPI following:
- More money out of your pocket
- Limited Benefits in Some Cases
- Potentially Better Alternatives
Mortgage protection insurance cost
The cost of mortgage insurance will vary depending on factors such as your age and the cost of paying off your mortgage.
For obvious reasons, mortgage payment insurance against accidents, illness and unemployment is more expensive than insurance against unemployment only or only against accident and illness.
Where can i get mortgage protection insurance?
İf you think that MPI is good option for you, then you can apply the same approach you used to find your actual mortgage.
MPI is not widely available as other traditional ones, then it will take some time before making the final choise. Look around what companies offering, compare prices, features of various policies MPI. Make sure that you understand what is covered or not covered by particular policy before making final decision. While you’re at it, remember to compare your life insurance costs to this MPI policy – you may find that one option is more appropriate for your situation than the other.
Best mortgage protection insurance companies
Life insurance is an important financial product that can protect your family if something happens to you. One of the most important factors to consider when buying life insurance – and when calculating the coverage you need – is a mortgage.
Mortgage insurance is a term policy that decreases coverage as the cost of your mortgage decreases over time. Although mortgage protection insurance products were available not so long ago, carriers have gradually phased out them because most people do not stay in the same home for 30 years or refinance at some point. These days, it makes more sense to purchase a term life insurance instead, which can protect your family while you are away, including paying off the balance of your mortgage on your home.
Here we have listed best mortgage protection insurance companies:
Haven Lifie is working best for all.
If you have young famili then Banner life is work best for you.
USAA is for veterans.
If you have 30- year term mortgage then State Farm is best for you.