Is mortgage protection insurance required?:
Mortgage protection insurance is not required. It is not similar to private mortgage insurance which most banks or lenders will request you to buy.
Below is the meaning of the two terms as used:
Mortgage protection insurance, or MPI: It is a type of credit life insurance, which means you aren’t required to purchase it and it pays the lender instead of your beneficiaries.
Private mortgage insurance, or PMI: It is a different product. Your lender can require you to purchase private mortgage insurance if your down payment is less than 20%.
Do you need mortgage protection insurance?:
The indifference of mortgage life payouts means you are most often better off with a normal term policy with more coverage to pay off your mortgage. Then, when you die, your family has options to either use the death benefit to pay off the house or keep any leftover cash.
In addition, they can choose to jump paying off the mortgage and instead spend the money as they wish to. This is their money, not any bank or lender.
A mortgage life insurance policy caused your beloves to be locked up into paying your off the mortgage even if other bills keep popping up.
The huge benefit of mortgage protection insurance is the fact that it is convenient. It is in line exactly with your mortgage balance and most of the time, there is no life insurance medical examination required in order to buy the policy or get on.
If you have ever been denied a term or whole life insurance, then look no further than mortgage insurance, at least, it would serve as a means of protecting your home.
It also serves as a top-up for an individual’s life insurance policy.
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