Everyone who owns a home, or recently purchased a home, has seen the postcards, flyers, and marketing mailers talking about protecting the loan amount of your home against your death, disability, or illness using Mortgage Protection Insurance.
What is Mortgage Protection Insurance?
Mortgage Protection Insurance (MPI) is not your PMI on the mortgage (which only insures the bank against you not paying your mortgage) it’s a type of life insurance designed to cover the loan amount of your home to protect your spouse against unexpected death, disability, or illness. Traditionally, MPI is a term insurance plan set to match the equity or owed amount on the mortgage and set anywhere from 20-30 years. As stated, some plans even offer protection in the event of disability and/or Critical and Chronicle Illness.
Should I get Mortgage Protection? Short Answer, Yes. Even if you have the equity, or money in the bank/investments, protecting those assets is part of a healthy financial plan. For those not keen on “losing money” there are companies that now offer Return of Premium riders which gives the insured all their money back at the end of the 20-30 year term. In these situations, its best to set the term 5 years before your mortgage loan is matured, then use the refunded money to pay off the existing balance saving you thousands in interest.
As always stated on this site, insurance is a tool used to create financial stability and protection. Take a look at your current financial situation, if sudden death, disability, or Critical Illness will affect you or your family, then its time to plug those gaps with Plan4Life Insurance.