Mortgage protection insurance (MPI) can provide an excellent safety net for your home if you lose your income due to job loss, disability or an illness. If you are looking to take out an MPI policy, it’s good to know a few things beforehand. First, it’s important to understand that MPI will cover your mortgage if you become sick, disabled or unemployed. It’ll keep your family in your home while you embark on the job search, seek disability benefits or compensation for damages or generally work to replace your income. It will also ensure that your mortgage is paid if you die unexpectedly. This will take the burden off your loved ones and settle debt before it accumulates. It’s also important to understand that MPI is different from PMI, or private mortgage insurance. The latter covers you in the event of a foreclosure, but it doesn’t cover anything related to disability or job loss, and it doesn’t help your family if you die unexpectedly. You may want to have both MPI and PMI policies.
Your mortgage protection insurance cost can vary depending on things like your career and your current health. For example, if you have a chronic medical condition that could worsen in the future, your rates might be higher than a fully-healthy individual. You’ll also pay more if you work in a high-risk job where debilitating injuries are common.
Most mortgage companies will offer MPI as a matter of course, but you don’t have to make a rushed decision. MPI can be purchased at any time, and it operates on a “guaranteed acceptance” basis. You have time to consider your options and do the research. Once purchased, and MPI policy is likely to give you peace of mind that your loved ones will be protected and foreclosure will be prevented.