What Does Mortgage Protection Insurance Cover?

​Mortgage protection insurance is one of those policies that lenders require from their borrowers when buying a house. However, some people need to become more familiar with this insurance and what it can do for them. Read on to learn how mortgage protection insurance can help you.

Mortgage Protection Insurance
MPI, or Mortgage Protection Insurance, helps cover your mortgage balance once you pass away. Your lender will receive the amount directly and not your family. This insurance is solely for a specific purpose and is tied to your loan balance, unlike traditional term life insurance. 

There could be similarities with term life insurance, especially in supplementing your mortgage balance. Though, there are differences:

Payout
Term life insurance provides a level to your death benefit, which means the amount of your life policy stays the same. On the other hand, Mortgage Protection Insurance’s benefit may decrease while you pay your mortgage. 

Beneficiary
You can designate a specific name as your beneficiary for term life insurance. You could designate it to your child, spouse, parents, or family member. The death benefit your beneficiary receives can be used for any financial responsibilities. The payout may pay for a mortgage and final expenses, lost income, or additional bills. 

However, with mortgage life insurance, your beneficiary will be your lender. They will be able to redeem your death benefits once you pass.

Most mortgage lenders may require you to get insurance based on your down payment and the mortgage amount. Other related insurance like Private Mortgage Insurance or Mortgage insurance premium. Your lender may require you to choose different purchasing options that involve two additional insurance:

Private Mortgage insurance may be required if you add other premiums and a 20% or lesser down payment. 

Mortgage Insurance Premium - this insurance requires upfront and additional fees related to regular mortgage payments. It is also needed when you use a Federal Housing Administration loan. Even more, it helps protect your lender against delayed payments.

MPI Benefits Your Family
We all want our family to have a peaceful and happy life even after we leave. We leave them memories and beautiful moments as much as possible. Mortgage Protection Insurance can help you with paying off your mortgage balance. You can be at peace knowing your family does not have to suffer from debt.

At UG Insurance Brokerage Inc, we do our best to make sure that our clients are well-protected with affordable and comprehensive policies. We make sure to go the extra mile to help you with your needs. To learn more about how we can help you, please contact our agency at (718) 848-7777 or CLICK HERE to request a free quote. Topics and coverage discussed in this article are not guaranteed, consult with your agents to determine what your policy does and does not cover. We are more than happy to help!