What is Mortgage Protection Insurance?
Mortgage protection insurance, also known as mortgage life insurance, is a type of life insurance designed to pay-off your mortgage and provide financial protection in the event of your death.
Is it the Same As Private Mortgage Insurance (PMI)?
No, Private Mortgage Insurance or PMI is used to protect your lender should you default on payments. With a mortgage protection insurance policy, the death benefit is used to pay off the remaining balance on your mortgage. Mortgage protection insurance instead protects your family and loved ones and allows them to keep your home in the event of your untimely death.
How long does Mortgage Protection Insurance Last?
Normally, mortgage protection insurance is purchased for a 30-year duration to match a typical mortgage term. However, depending on the time remaining in the mortgage and other needs, the term of the policy can be more or less than the term of the mortgage.
Who Should Purchase Mortgage Protection Insurance?
Mortgage protection insurance can be purchased with the sole purpose of paying off your mortgage, but many financial planners would suggest that you look at your financial situation as a whole and buy a life insurance policy that takes all of your finances into account.